CERC Amends Power Transmission Rules for Greater Accountability

The new framework aims to address delays and streamline the billing process

October 26, 2023


The Central Electricity Regulatory Commission (CERC) has amended the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2020, to provide a structured framework to address delays, promote accountability, and streamline the billing process.

Effective from November 1, 2023, these amendments will be known as CERC (Sharing of Inter-State Transmission Charges and Losses) (Second Amendment) Regulations, 2023.

Definition of “Deemed COD”

The amendment brings an important change by defining the Deemed Commercial Operation Date (COD). Deemed COD represents the commercial operation date for a transmission system or its parts. There are two scenarios for determining Deemed COD:

Redefining “Is Delayed” and Introducing New Clauses

The amendment makes several fundamental changes. First, it replaces “is delayed” with “has not been achieved.” A new set of rules has been introduced outlining how yearly transmission charges (YTC) are treated for inter-state transmission systems (ISTS) or parts considered Deemed COD.

The new rules stipulate the following:

  • Inter-State transmission licensees will receive 50% of their YTC for the first six months or until actual power flow starts, whichever comes first, from the Deemed COD.
  • They will receive 100% of YTC from the seventh month onward if the power flow hasn’t begun within six months of the Deemed COD.
  • If there is a shortfall, additional funds will be sourced from T-GNA and T-GNARE or, if necessary, from the Deviation and Ancillary Service Pool Account under DSM Regulations.

These rules do not apply to transmission elements covered under the transformer component. Instead, such elements will be billed to the respective drawee designated ISTS consumer of the state from the Deemed COD date. In cases where separate YTCs are unavailable, the calculation will be based on the estimated capital cost of similar configurations in the ISTS.

Delays and Liquidated Damages

The amendment deals with situations where one inter-state transmission licensee causes a delay in another licensee’s system that has achieved Deemed COD.

In such cases, the responsible licensee must pay 50% of its system’s YTC or 50% of the YTC of the system that achieved Deemed COD, whichever is lower, until the delayed system achieves COD. This rule applies no matter what agreements are in place between the parties. If liquidated damages are imposed for the delay, that amount will be used to offset the liability, and any remaining balance will be credited to the Regional Transmission Deviation account.

Similar rules apply to intra-state transmission licensees, causing delays. They need to pay 50% of the YTC for the delayed intra-state transmission system or 50% of the YTC for the ISTS that achieved Deemed COD (excluding elements under the Transformer component). When YTC for the delayed intra-state system is unavailable, the Central Transmission Utility will calculate it based on the estimated capital cost of similar setups in the ISTS.

Impact on Tariff-Based Competitive Bidding

For ISTS operating under tariff-based competitive bidding, the first contract year begins when the transmission licensee receives 100% YTC.

The Commission recently addressed issues related to implementing the Grid Code Regulations about the scheduling of generating units, revision of estimated restoration time, revision of declared capacity, and obligation to supply in case of unit shutdown, among others.

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