CERC Proposes Draft Fees and Charges For DISCOMs and other Entities

Control period will be from April 1, 2019, to March 31, 2024

February 28, 2019


The Central Electricity Regulatory Commission (CERC) has issued draft (Fees and Charges of Regional Load Dispatch Centre (RLDC) and other related matters) Regulations, 2019. These regulations will come into effect from the date of their publication in the Official Gazette and will be applicable during the control period starting April 1, 2019, and ending March 31, 2024.

These regulations will be applicable for the determination of fees and charges to be collected by RLDCs from the generating companies, distribution licensees/companies (DISCOMs), interstate transmission licensees, buyers, sellers, and inter-state trading licensees and any other users.

Key Highlights

  • The fees and charges will be determined separately for each RLDC and National Load Dispatch Centre (NLDC). Annual costs of NLDC including corporate office expenses for the control period will be apportioned among RLDCs by the peak met (in MW) in the respective regions.
  • The points considered for careful calculation of capital cost include; reasonableness of capital cost, financing plan, interest during construction, use of efficient technology, upgradability/ scalability of the technology and systems to accommodate the growing requirement of system operation. Other considerations are; cost overrun and time over-run, procurement of equipment and materials through competitive bidding and matters considered appropriate by the commission for determining fees and charges.
  • The RLDC fees and charges will comprise RLDC fees to be recovered by Power System Operation Corporation towards registration for the commencement of grid access and scheduling and annual expenses to be collected in the form of yearly load dispatch charges from users.
  • Operational expenditure will include services like cloud computing, data storage, data center, big data analytics tools, advanced data visualization tool (with GIS interfacing), satellite services, weather data services, WebNetUse, forecasting services, licensee fee for the software.
  • Power System Operation Corporation will create and maintain a separate fund called ‘Load Dispatch Centre Development Fund’ to administer capital expenditure.
  • The DISCOMs and interstate transmission licensees will pay non-refundable one-time registration fees of ₹1 million (~$14,094) for the commencement of grid access.
  • Generating stations with an installed capacity of up to 10 MW have to pay ₹50,000 (~$704.702); generating stations having installed capacity of not less than 10 MW and up to 100 MW have to pay ₹100,000 (~$1409.40). Generating stations having installed capacity of not less than 100 MW and up to 2,000 MW need to pay ₹500,000 (~$7047.02), and generating stations having a capacity of 2,000 MW and above have to pay ₹1 million (~14,094) as registration fees.
  • Interstate trading licensees, sellers, and buyers must pay a one-time registration fee of ₹10,000 (~$140.94) for the commencement of scheduling for market operation.
  • The power exchanges have to pay ₹2 million (~$28,188.1) as one-time registration fees to NLDC.

The draft is open for comments and suggestions up to March 18, 2019. CERC will hold a public hearing on the matter on March 20, 2019.

Understanding the need to bring about improvements in the current market design, for better optimization of scheduling and economic dispatch of generation capacities, the CERC is planning to modernize, rejig, India’s power market.

Recently, CERC finalized the amended regulations for open access in interstate transmission, which were initially passed in 2008. Earlier this month, a CERC committee recommended that POWERGRID can monetize its transmission line towers by offering it to mobile telecom service providers on a commercial basis under section 41 of the Electricity Act, 2003, which allows for effective utilization of assets to benefit the society at large.