Do large hydro projects pay inter-state transmission system charges, and does the award date or the power purchase agreement date decide it?
Under the Ministry of Power order of 1 December 2022, no inter-state transmission system (ISTS) charges apply to hydro projects whose construction work is awarded and power purchase agreement (PPA) signed up to 30 June 2025. Later ones pay 25%, 50%, 75% and then 100% from 1 July 2028.
The 1 December 2022 order
- Large hydro projects above 25 megawatts (MW) have been declared renewable energy sources by a Ministry of Power office memorandum of 08.03.2019.
- No ISTS charges shall be levied for transmission of power from hydro power projects where construction work is awarded and the PPA is signed till 30.06.2025.
- Where construction work is awarded and the PPA signed after 30.06.2025, charges are 25% for 01.07.25 to 30.06.26, 50% for 01.07.26 to 30.06.27, 75% for 01.07.27 to 30.06.28, and 100% from 01.07.28.
- The waiver or concessional charges in the table apply for a period of 18 years from the date of commissioning of the hydro power plant.
- The waiver is for ISTS charges only and not losses.
- The waiver would be made applicable from a prospective date, and no waiver would be provided to the capacity where PPAs have already been signed.
Where the order is silent
The table is headed with both events, the award of construction work and the signing of the PPA. The order does not say which date counts when the two fall in different bands, for example construction awarded in May 2026 and the PPA signed in August 2026. Ask the developer which date it relies on and get it in writing.
The last item says no waiver for capacity where PPAs have already been signed, and the first item grants the waiver where the PPA is signed till 30.06.2025. The order prints no cut-off date for the word already. Our reading is that it means capacity already contracted when the order was issued; confirm that with the Ministry or the transmission utility.
Pumped storage is a separate rule
Pumped storage plants are dealt with in other orders, with their own dates. The 10 June 2025 order sets a 100% waiver where their construction work is awarded on or before 30 June 2028.
Bands by date, from the order's table
- Award and PPA both on 20 March 2025: no ISTS charges, for 18 years from commissioning
- Both on 15 October 2026: band 01.07.26 to 30.06.27, so 50% of the applicable charges, for 18 years
- Both on 10 January 2028: band 01.07.27 to 30.06.28, so 75%
- Both on 5 September 2028: from 01.07.28, so 100%
The dates are an example. The bands, the 18 years and the exclusion of losses are the order's.
What Senseible does here
Senseible reads your electricity bills and fuel invoices into dated records, so the units on your bills are on file. It does not read transmission orders or tell you which waiver band a project falls in; that comes from the developer's award and PPA dates.
- Large hydro and Scope 2 in India
- Battery storage transmission waiver to 2028
- Transmission waiver orders by date
- Is the transmission charge waiver still available?
- Emissions calculators
Sources: Ministry of Power, orders on waiver of inter-state transmission charges, 2020 to 2025 (compiled PDF)
Last reviewed 2026-11-06. Read from the image pages of the 1 December 2022 order (No. 23/12/2016-R&R) in the compiled PDF, on 6 November 2026; that order is a scanned image in the PDF, so the figures were checked by eye. The order was issued under sub-rule 12 of rule 5 of the Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules, 2021. The two readings flagged above are our own.