CERC Details Mechanism for Sharing ISTS Charges and Losses from Renewable Projects

The commission has also provided several exemptions for the charges

November 5, 2019


The Central Electricity Regulatory Commission (CERC) has issued a draft regulation for sharing inter-state transmission charges and losses.

The commission has stated that the regulations will apply to all the designated inter-state transmission system (ISTS) customers, inter-state transmission licensees (ISTL), national load despatch center (NLDC), regional load despatch centers (RLDCs), state load despatch centers (SLDCs), and regional power committees (RPCs).

These regulations will come into force from the date notified by the Commission.

According to the draft, the transmission charges will be shared among the designated ISTS customers so that the yearly transmission charges are fully covered and any adjustment on account of the revision of transmission charges are recovered.

The computation of the share of transmission charges for each designated ISTS customers will be based on the technical and commercial information provided by the designated ISTS customers, inter-state transmission licensees, NLDC, RLDCs, and SLDCs to the implementing agency.

The customers will share the charges for the transmission system after it has achieved the date of commercial operation (COD) with regular service.

The National Component-Renewable Energy (NC-RE) will comprise of transmission charges for the transmission systems developed for renewable energy projects as specified by the central transmission utility. The customers will share these transmission charges in the ratio of the amount of long-term (including the medium-term) open access.

Moreover, the AC System Component will comprise of transmission charges excluding the transmission charges covered under the NC-RE and the National Component-HVDC (high voltage direct current).

According to the draft regulation, transmission charges and losses for the use of ISTS will be waived off in the following special cases:

  • Solar projects commissioned from July 1, 2011, to June 30, 2017
  • For the solar or wind projects for 25 years from the date of commercial operation, if:
  • Power purchase agreements have been executed with the distribution companies for the compliance of their renewable purchase obligation (RPO)

The commission also states that the long-term and medium-term open access are exempted for the computation of transmission charges for the cases mentioned above.

In case the date of commercial operation of a project is delayed, and if the associated transmission system has achieved the commercial operation as scheduled, the yearly transmission charges have to be paid for the whole project.

On the other hand, if the project has achieved commercial operation and the transmission system is delayed, the concerned transmission licensee will be required to make an alternate arrangement for the evacuation of power. Until such an alternative arrangement is made, the transmission licensee will have to pay the charges proportionate to long-term access for the transmission system, which is delayed.

If the long-term access to ISTS is granted to a project on the existing margins and commercial operation of the project is delayed, then the transmission charges at the rate of 10% of state transmission charges will have to be paid.

The draft order states that in case of payment default by a customer for more than 60 days, the central transmission utility will serve notice, which would have to be resolved with sixty days. If not resolved within 60 days, the defaulter would cease to be a customer with the membership terminated by the central utility.

This draft regulation has taken a tough stance on the utilization of the ISTS network for renewable projects.

In March 2019, Mercom reported that the CERC had issued a notification regarding an amendment for the sharing of the ISTS charges and losses. The regulation was introduced in 2010 and has been amended six times.

Previously, the CERC issued a notification to address the procedure, terms, and conditions for acquiring licenses for electricity trading.

Image credit: Zorba the Geek, CC BY-SA 2.0