COVID-19 Forces CERC to Postpone Implementation of Amended DSM Regulations

The present regulations will continue to be applicable until May 31, 2020


The Central Electricity Regulatory Commission (CERC) has rescheduled implementing the fifth amendment of deviation settlement regulations from April 1, 2020, to June 1, 2020.

The present regulations (Regulation 7) will now be valid until May 31, 2020.  The move comes in the wake of the Coronavirus outbreak in the country.

Referring to the website of Power System Operation Corporation Limited (POSOCO), the Commission stated that in the wake of the pandemic, electricity demand is expected to fall sharply in the coming days.

On March 22, 2020, the day ‘Janta curfew’ was observed across the country, the power sector witnessed a 10-15% reduction in power demand as compared to the preceding week (March 15, 2020) for different hours of the day.

“As the country goes under lockdown, further reduction in power demand is expected,” the CERC predicts.


Following the announcement of the fourth amendment to the deviation settlement in November 2018, the Central Electricity Regulatory Commission received complaints from several stakeholders regarding technical and operational constraints in implementing some of the provisions. To address these issues, the CERC issued its fifth draft amendment to the deviation settlement regulations, which include two new clauses: daily base deviation settlement mechanism (DSM) and time block DSM, as reported previously by Mercom.

Daily base deviation settlement mechanism means the sum of charges for deviations for all time blocks in a day payable or receivable excluding the additional charges. Time block DSM indicates the charge for deviation for the specific time block in a day payable or receivable excluding the additional charges.

In May 2019, it was reported that the Commission accepted all the proposals put forward in the draft of fifth amendment regulations. It provided relief to generators through exemption from additional charges.

According to the CERC, renewable energy generators which are regional entities, run river projects without pondage, any infirm injection of power by a generating station before the commercial operation date of a unit during testing and commissioning activities will not be liable to an additional charge for any failure to adhere to the sign change requirement.

Run-of-the-river power projects generally have no water storage or a limited amount of storage, so the storage reservoir is referred to as pondage. A project without pondage is dependant on seasonal river flows, due to which the plant will operate as an intermittent energy source.

The CERC has also said that any withdrawal of power by a generating station for the start-up activities of a unit, any inter-regional deviations, forced outage of a generating station in case of collective transactions on power exchanges will not be liable to an additional charge for any failure to adhere to the sign change requirement.

The economic and social repercussions of the ongoing pandemic have started to hit India, and the power industry is grappling with lower collections, subdued demand, and difficulty in operationalizing assets. You can track the latest updates related to the impact of COVID-19 on renewable and power industries here.


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