Network Pricing in India: Policies and Practices

Abstract

India is moving from a vertically and horizontally integrated power industry towards an open market, multi-buyer multi-seller structure associated with an independent regulatory framework. This article outlines a snapshot of the Indian power industry, along with discussing the recently implemented legislative and policy reforms. These reforms impact the network pricing models, consequently impacting the economic signals being provided for load and generation customers. Transmission network pricing is experiencing challenges with the implementation of open access, availability-based tariffs, and power trading. Visualizing the impact of recent policies and regulations on pricing, and consequently on customer tariff, this article tries to analyze the network pricing practices in India and the possible role that alternative methodologies can play.

Keywords:

• electric network pricing
• regulation
• tariff