FACTSHEET - ISTS CHARGES WAIVER FOR CHHATTISGARH - Decoding the impact on

This socialization mechanism has had an uneven impact on the transmission bills of states based on their overall dependence on the ISTS network for power procurement and the share of RE in it. [...] However, accounting for the amount apportioned back to the state, the net impact on the transmission bill has been limited to 4.2 percent. [...] • Given that the effective ISTS charges waivers for the state is about I0.60 per unit, while the generation differential can be up to I0.14 per unit, it acts as a significant market distortion driving up the demand for solar imports. [...] • Meanwhile, the policy of focusing on ‘RE-rich’ areas is necessitating massive investments in ISTS projects to evacuate power from ‘RE-rich states.’ These investment costs are being recovered through the national component (NC)-RE of the ISTS charges, burdening even the states that do not procure ISTS RE power. [...] • Even in the case of Chhattisgarh, which benefits from the waiver, the net benefit per month amounts to only about I33 million per month, which is a big price to pay for the loss local economy and energy security due to increased reliance on RE imports.