Bangladesh faces new charge on India electricity imports
The SNA charge is separate from the electricity tariff and covers grid operations, scheduling, metering, energy accounting and the settlement of cross-border electricity transactions.
Bangladesh is set to pay a new charge for importing electricity from India, with the proposed Settlement Nodal Agency (SNA) Charge set at 0.005 Indian rupees per unit.
The SNA charge is separate from the electricity tariff and covers grid operations, scheduling, metering, energy accounting and the settlement of cross-border electricity transactions.
India's state-owned power trading company NTPC Vidyut Vyapar Nigam Limited (NVVN) and the Bangladesh Power Development Board (BPDB) have initiated the process of signing an SNA agreement. On 18 August, the Power Division wrote to the
Finance Division seeking its opinion on the proposed agreement.
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A senior finance official, speaking on condition of anonymity, said India had initially proposed a charge of one Indian paisa per unit.
"Following negotiations, the BPDB managed to bring the rate down to 0.005 rupee, or half a paisa, per unit," he said.
The official said the agreement is required under India's electricity regulations and that any delay in signing it could disrupt Bangladesh's imports of 1,160MW of electricity from India.
A Power Division official, also speaking on condition of anonymity, said that although the charge is small, its overall financial impact would be significant given the large volume of electricity Bangladesh imports from India over the long term.
Similar SNA also applied to Nepal, Bhutan
According to power officials, an SNA charge of 0.005 Indian rupee per unit of scheduled energy has been proposed under the SNA Agreement.
The proposal was submitted to India's Central Electricity Regulatory Commission (CERC) following a written request from the BPDB. The rate currently applied to India's electricity trade with Bhutan and Nepal was also considered in setting the proposed charge.
The letter said Bhutan and Nepal already have SNA agreements with India and pay a charge of 0.005 Indian rupee per unit. The same rate has been proposed for Bangladesh.
If Bangladesh imports the full 1,160MW covered by the agreement continuously, it would receive 1.16 million units of electricity per hour. At 0.005 rupee per unit, the SNA charge would amount to 5,800 Indian rupees per hour.
One unit of electricity is equivalent to one kilowatt-hour (kWh), meaning the amount of electricity consumed by a 1,000-watt appliance operating continuously for one hour.
Why SNA charge
The SNA charge is not part of the electricity price. Rather, it covers the costs associated with grid operations and the settlement of cross-border electricity transactions.
The Power Division's letter said CERC has established the SNA mechanism to facilitate the settlement of grid-related charges in electricity trade with neighbouring countries.
Under CERC regulations, the SNA is responsible for functions related to grid operations, power scheduling, metering, energy accounting, settlement of charges arising from deviations between scheduled and actual power supply, and other grid-related payments.
Bangladesh is treated as a separate control area within India's power grid, with specific arrangements for metering, energy accounting and settlement of electricity imports.
Therefore, charges associated with grid operations and the settlement of cross-border power transactions are levied separately from the electricity tariff as the SNA charge.
Bangladesh's power import from India
Bangladesh has been importing electricity from India for years. Under various agreements, the country currently has arrangements to import up to 2,656MW from India.
Of this, 250MW comes from an NTPC plant through NVVN, 300MW from Damodar Valley Corporation, 160MW from Tripura State Electricity Corporation, 200MW from a Sembcorp Energy India plant through PTC India, and another 250MW from Sembcorp Energy India.
The proposed SNA covers the combined 1,160MW supplied under these five arrangements.
Separately, the BPDB has an agreement to import 1,496MW from Adani Power's Godda plant in Jharkhand.
A power official said the SNA charge is already incorporated into the agreement with Adani, so no separate agreement is required for that supply.
Imported electricity from India has become increasingly important to Bangladesh's power system. The country has become more reliant on Indian power to meet domestic demand amid gas shortages, rising fuel import costs and production constraints at local power plants.
Once the agreement takes effect, the charge will be added to Bangladesh's electricity import costs on top of the electricity tariff.
