The Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued clarifications on the applicability of wheeling and Deviation Settlement Mechanism (DSM) charges for intrastate open access consumers, proposing a one-time settlement mechanism for past billing periods up to January 2026.

The Commission has held that deviations and revenue mismatches arising in the billing of Multi Supply Consumers (MSCs) were the result of misinterpretation and misapplication of the DSM Regulations, 2016, rather than a deliberate attempt to gain unfair advantage.

To address this, CSERC has proposed recalculation of past bills using the Average Billing Rate (ABR) to ensure full cost recovery for the distribution licensee while avoiding unjust enrichment of consumers.

Stakeholders have until February 11, 2026, to submit their views and suggestions.

Background

The proceedings arose from a clarification order dated December 23, 2025, issued by CSERC regarding the implementation of the DSM Regulations, 2016, based on inputs from the Chhattisgarh State Load Despatch Centre (SLDC).

Following this clarification, Real Ispat, Power, and Gravity Ferrous submitted representations stating that the clarification had created operational and financial difficulties.

Taking cognisance of these representations, the Commission initiated a suo motu petition, impleading the affected MSCs, SLDC, the Chhattisgarh State Power Transmission Company, and the Chhattisgarh State Power Distribution Company.

SLDC was directed to furnish details of MSCs availing intrastate open access after notification of the DSM Regulations, 2016, following which additional consumers were impleaded.

Commission’s Analysis

The Commission examined the settlement framework under the DSM Regulations, 2016, which require the total scheduled drawal of an MSC to be computed as the sum of the contract demand with the distribution licensee and the open access injection schedules.

It noted that, while the regulatory intent allows consumers to either reduce contract demand or meet incremental demand through open access, several MSCs continued to maintain their original contract demand despite sourcing substantial power through open access.

This resulted in persistent under-drawal against the total scheduled drawal, leading to distortion of DSM charges.

CSERC observed that the DSM Regulations do not permit either sellers or buyers to derive undue financial gains arising from improper regulatory application, misinterpretation, or the use of the ABT/DSM mechanism in a manner not intended.

The Commission proposed a special one-time settlement mechanism for past periods. Under the proposed approach, CSPDCL, in coordination with SLDC, will recalculate past bills based on actual energy supplied, apply the applicable ABR for the consumer category (computed at 100% load factor), and adjust DSM charges already paid or received.

The Commission clarified that this mechanism is limited to past transactions and will not dilute the prospective and strict application of the DSM Regulations or the December 2025 clarification.

LastJanuary, CSERC had issued the Draft Intra-State DSM and Related Matters Regulations, 2025.

Recently, CSERC proposed generic levelized tariffs for renewable energy projects to be commissioned during the financial year (FY) 2025–26. Under the proposal, solar projects with capacities of 500 kW to 2 MW have been assigned a levelized tariff of ₹3.39 (~$0.038)/kWh, down from ₹4.34 (~$0.048)/kWh in FY25.

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