A recent declaration by the Arunachal Pradesh State Electricity Regulatory Commission outlines new guidelines impacting renewable energy projects within the state such as Arunachal Pradesh State Electricity Regulatory Commission (Terms and Conditions for Determination of Renewable Energy Tariff) Regulations, 2024. These regulations, effective upon publication in the Official Gazette, are designed to establish terms and conditions for determining tariffs associated with renewable energy sources.
According to the commission’s directive, these regulations will be in effect for a defined “Control Period” of three years, beginning from the fiscal year 2024-25 and extending through 2026-27. During this period, tariffs set under these regulations will remain valid for the entirety of what is termed the “Tariff Period,” which can extend beyond the Control Period.
The commission’s approach involves setting generic tariffs annually, applicable to specific types of renewable energy projects such as small hydro and biogas-based power. For projects falling into these categories, the tariff determined in the year of project commissioning will remain in effect for the entire “Tariff Period,” ensuring stability and predictability for developers.
In certain circumstances, developers can request a project-specific tariff from the commission. This option is available for projects like larger small hydro schemes, wind power projects, and solar photovoltaic installations, among others. These bespoke tariffs are determined on a case-by-case basis by the commission.
The regulations also address the procurement of renewable energy by distribution licensees (entities licensed to distribute electricity) within their designated areas. When purchasing power from renewable energy projects at the generic tariff set by the commission, the licensee must seek prior approval for a standard Energy Purchase Agreement. Alternatively, for projects with specific tariffs determined by the commission or adopted under statutory provisions, a separate approval process is required.
Furthermore, the regulations stipulate that all renewable energy plants will be classified as “Must Run” facilities, meaning their power must be accepted by the distribution licensee without consideration of “Merit Order Dispatch” principles.
In terms of payment for energy charges, the regulations introduce a late payment surcharge if bills are not settled within 45 days of presentation. The surcharge is defined by established rules from the Ministry of Power.
The commission will factor in government incentives, grants, or subsidies received by a project when determining tariffs. This includes considerations for income tax benefits like accelerated depreciation. The process for assessing these benefits is outlined to ensure transparency and fairness in tariff calculations.
The regulations aim to streamline the tariff determination process for renewable energy projects in Arunachal Pradesh, providing clarity and structure while accounting for various project types and financial considerations. Developers and stakeholders are encouraged to engage with the commission for specific interpretations or to seek project-specific tariff evaluations based on the outlined criteria. These regulations underscore a concerted effort to encourage sustainable energy development within the state.
Please view the document here for more details.
