The Central Electricity Regulatory Commission (CERC) has extended the applicability of the existing mechanism for sharing deficits in the Deviation and Ancillary Service (DAS) Pool Account under the Deviation Settlement Mechanism Regulations, 2024.

The Commission ruled that the current cost-sharing formula, which is based on a 50% drawal and 50% General Network Access (GNA), will continue until October 4, 2026, instead of  ending on March 31, 2026.

Consequently, the new mechanism, in which any deficit in the DAS Pool Account is to be shared in the ratio of the shortfall of reserves allocated by the National Load Despatch Centre (NLDC) to designated interstate transmission system (ISTS) consumers, will now take effect from October 5, 2026, instead of April 1, 2026.

Background

The matter arose from the implementation of Regulation 9(7) of the DSM Regulations, 2024, which governs the recovery of deficits in the DAS Pool Account from designated ISTS consumers.

As per the regulations, until March 31, 2026, deficit recovery is based on a 50:50 ratio of ISTS drawal and GNA.

From April 1, 2026, the mechanism was slated to shift to a reserve-based allocation methodology, in which deficits are recovered based on the shortfall in reserves allocated by the NLDC.

However, Grid-India and NLDC highlighted operational challenges in implementing the new framework, including quantification and declaration of reserves, measurement of actual reserves, and development of dispatch and settlement mechanisms

NLDC also emphasized the need to establish a detailed methodology and procedural framework before transitioning to the new system.

Commission’s Analysis

The Commission acknowledged that the reserve-based settlement mechanism requires significant operational and procedural readiness, which is currently lacking.

It noted that more time is necessary to develop methodologies for reserve computation and allocation, establish systems for measuring, dispatching, and settling reserves, and finalize NLDC procedures with regulatory approval.

The Commission held that deferring the implementation of the new mechanism is necessary to ensure a smooth transition and avoid disruption.

Recently, CERC proposed revising the methodology for determining congestion charges in real-time interstate transmission.

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