The Karnataka Electricity Regulatory Commission (KERC) has issued regulations governing the procedure, terms, and conditions for granting transmission licenses for intrastate transmission projects selected through tariff-based competitive bidding.

The regulations will apply to intrastate transmission projects in Karnataka developed under the tariff-based competitive bidding route.

KERC has amended the fee payable by other transmission licensees. The earlier fee of ₹100,000 (~$1049)/MW, or part thereof, for transmission capacity, subject to a maximum of ₹2 million (~$20,991)/year, has been replaced by a flat annual fee of ₹2 million (~$20,991).

The Commission has also introduced an application fee of ₹2.5 million (~$26,240) for the adoption of transmission tariffs filed under Section 63 of the Electricity Act.

The state government has initiated action for executing intrastate transmission projects through tariff-based competitive bidding. It has constituted the State Empowered Committee on Transmission and authorized the Karnataka Power Transmission Corporation (KPTCL) to appoint one or more entities as bid process coordinators to implement the bidding process.

Under the regulations, KERC will grant transmission licenses under Sections 14, 15, and 86(1)(d) of the Electricity Act, 2003, to eligible special-purpose vehicles and adopt transmission charges for such projects.

The regulations define a bid process coordinator as an agency notified by the government to coordinate the process of inviting bids and selecting the successful bidder for procurement of intra-state transmission services under the competitive bidding guidelines.

The regulations also define a project as one or more elements included in the transmission plan to be developed as an intrastate transmission system under tariff-based competitive bidding.

Applicants seeking a transmission license or amendment to an existing license must submit details, including the applicant’s incorporation and registration particulars, project details, transmission line and substation details, scheduled commercial operation date, quoted transmission charges, government approval, and the evaluation report issued by the bid process coordinator.

For new transmission licenses, applicants must publish a public notice in at least two daily newspapers, one in English and one in Kannada. The notice must include details of the transmission lines and substations, the quoted transmission charges, the scheduled commercial operation date, and other relevant project information.

Objections or suggestions must be filed before the Secretary of KERC within 15 days of publication of the notice, with a copy to the applicant or its authorized agent.

A separate public notice format has been prescribed for the addition or deletion of transmission elements in an existing license. In such cases, the applicant must provide details of the existing license and the transmission elements proposed for addition or deletion.

The regulations provide that a transmission license will allow the licensee to construct, own, maintain, and operate the project specified in the schedule attached to the license.

The license conditions will include the completion schedule, transfer value, liquidated damages, project implementation guarantee deposit, escalation due to domestic inflation, and any other provisions specified in the bid documents and agreements.

The license will remain valid for 25 years from the date of issue unless revoked earlier. It will not be transferable except as permitted under the regulations.

The grant of a license will not restrict KERC’s right to grant a license to another person for the same area or transmission system other than the project described in the schedule attached to the license.

If KERC finds that a licensee is contravening or is likely to contravene the terms and conditions of its license, it may issue a notice seeking an explanation. The licensee and affected persons may submit objections or suggestions within 30 days.

After considering the objections and suggestions, KERC may pass orders or issue directions to secure compliance with the license terms and conditions.

Disputes related to the interpretation of the license or its terms and conditions must, to the extent possible, be resolved through mutual consultation and reconciliation under the relevant agreements.

If the parties fail to resolve the dispute through mutual consultation and reconciliation, the licensee must refer the matter to KERC for adjudication or arbitration within one month of recording such failure.

KERC has clarified that if additional solar or wind capacity is added to an existing co-located wind-solar hybrid power project, transmission charges will not exceed the capacity contracted with the transmission licensee, provided the total installed capacity is within the contracted limits.

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