The Rajasthan Electricity Regulatory Commission (RERC) has approved Rajasthan Rajya Vidyut Prasaran Nigam’s (RVPN) investment plan of ₹63.12 billion (~$652.7 million) for the financial year 2026-27, against the transmission licensee’s revised proposal of ₹65 billion (~$672.2 million).

RVPN had filed a petition seeking approval for an investment plan of ₹63.4 billion (~$655.6 million) for FY 2026-27. It later revised the proposed investment to ₹65 billion through an interlocutory application filed on March 23, 2026.

The Commission also granted in-principle approval to RVPN to hypothecate its assets to obtain loans for approved projects worth ₹61.08 billion (~$631.4 million). RVPN must submit copies of hypothecation agreements with lenders within one month of execution.

Background

RVPN filed the petition under the RERC Investment Approval Regulations, 2006. It later sought approval for an additional ₹1.6 billion (~$16.5 million) for projects announced in the Rajasthan government’s FY 2026-27 budget and other projects identified for system strengthening.

RVPN said the proposed investment would support transmission expansion, system strengthening, power evacuation, voltage regulation, loss reduction, substation augmentation, and replacement or modernization of ageing infrastructure.

For FY 2026-27, RVPN targeted the commissioning of 30 220/132 kV grid substations with a total capacity of 5,040 MVA and 28 132/33 kV substations with a total capacity of 2,050.50 MVA. It also proposed augmenting capacity by 5,000 MVA, 1,918.60 circuit kilometers of 220 kV lines, and 2,127.77 circuit kilometers of 132 kV lines.

The proposed funding sources included state government equity, Power System Development Fund grants, KfW loans, bonds, and loans from REC, PFC, NABARD, NCRPB, HUDCO, and commercial banks. RVPN said user contributions would fund the deposit work.

Stakeholders opposed RVPN’s investment plan, citing incomplete earlier projects, repeated claims for previously approved works, low FY 2025-26 spending, tariff impact, and inadequate justification. They sought load flow studies, project status updates, details of tariff-based competitive bidding (TBCB) projects, and reasons for carrying forward older works.

They also questioned the capitalization of information technology and operations and maintenance-type expenses, the need for large 132/33 kV capacity additions against projected demand, and the regulated tariff treatment of projects above ₹3 billion (~$31 million), including the 765 kV gas-insulated substation (GIS) Hindaun project linked to the Anta-II-Ajarka corridor.

RVPN said its investment plan covered ongoing, new, augmentation, capacitor bank, and transmission works, supported by detailed project reports and load flow studies. It argued that transmission planning must consider long-term load growth, reliability, renewable integration, generation evacuation, grid security, and local demand, rather than just one year’s peak demand.

RVPN said eight projects above ₹3 billion (~$31 million) would follow the TBCB route, while some required regulated tariff execution. It attributed delays to right-of-way issues, land constraints, forest clearances, litigation, Great Indian Bustard-related restrictions, and material availability. It said FY 2026-27 amounts often reflected the balance capital expenditure.

The transmission licensee also maintained that items such as relay replacements, substation automation system upgrades, information technology infrastructure, hotline equipment, and transformer monitoring systems were capital in nature.

Commission’s Analysis

RERC approved ₹48.88 billion (~$505.5 million) for RVPN’s ongoing projects. However, the Commission criticized delays in older projects, noting that about ₹3.2 billion (~$33.1 million) remained unclaimed for projects initiated before April 1, 2024. It said RVPN’s practice of allocating funds to new or other ongoing projects while keeping older projects pending caused time and cost overruns.

RERC directed RVPN to complete these projects at the earliest, submit completion reports, and provide project-wise justification for delays, supported by documents, where projects could not be completed within three years. It also directed the utility to assign accountability for delays attributable to RVPN.

The Commission directed RVPN to establish a dedicated project monitoring cell within one month of the order to ensure completion of projects within the proposed timelines.

For new projects, RERC did not consider RVPN’s ₹17.20 billion (~$177.9 million) Banswara project under the regulated tariff mechanism because the utility had not submitted the required State Committee on Transmission recommendation and Rajasthan government approval.

RERC also disallowed the ₹6.27 billion (~$64.8 million) 765/400 kV GIS Hindaun project under the regulated tariff mechanism. The Commission held that this project was part of an integrated Anta-II, Ajarka, and Hindaun transmission network and should be treated as one unified project with the connected upstream and downstream transmission systems.

The Commission directed RVPN to execute the Hindaun project through TBCB.

For new projects below ₹3 billion (~$31 million), RERC approved ₹4.52 billion (~$46.7 million) against RVPN’s proposed ₹4.89 billion (~$50.6 million). It approved the Budhadeeth project planned in two phases but disallowed the 400/220 kV, 500 MVA ICT at 400 kV GSS Deedwana (PPP), reserve transformers, and new PSDF-funded projects.

The Commission approved ₹560 million (~$5.8 million) for ongoing PSDF-funded projects but disallowed ₹440 million (~$4.6 million) for new PSDF-funded projects because RVPN had not received Government of India approval for the PSDF grant.

RERC allowed ₹670 million (~$6.9 million) for capacitor banks, ₹200 million (~$2.1 million) for STOMS extension, ₹200 million (~$2.1 million) for New STOMS, ₹350 million (~$3.6 million) for RTU and PMU works, ₹7 billion (~$72.4 million) for augmentation projects, ₹300 million (~$3.1 million) for the OPGW network, and ₹441.5 million (~$4.6 million) for SAP-ERP and IT systems.

The Commission disallowed ₹60 million (~$620,000) for the procurement of numerical relays and ₹100 million (~$1 million) for upgrading existing substation automation systems, holding that these works should be carried out as part of operations and maintenance expenses. It said the SAS expenditure could be considered over and above normative O&M expenses at the time of true-up.

RERC also disallowed ₹100 million (~$1 million) for hotline maintenance and ₹200 million (~$2.1 million) for replacement or new installation of online transformer monitoring systems. It said these projects should be treated as O&M expenses. For transformer monitoring systems, the Commission also noted that RVPN had not submitted a specific proposal with the number and cost of new installations.

The Commission directed RVPN to submit augmentation projects under the new projects category, along with detailed project reports for each project costing more than ₹50 million (~$517,000). RVPN must also provide detailed justification for each augmentation project, details of transformers being replaced, and where the replaced transformers will be used.

RERC directed RVPN to maintain a transformer movement register and submit it along with future petitions. The Commission also directed RVPN to assess techno-economic feasibility before taking up any new project and ensure that every detailed project report is approved by its board of directors or whole-time director before seeking investment approval.

RERC noted that RVPN’s proposed FY 2026-27 investment was more than four times its five-year average actual investment of about ₹15.72 billion (~$162.6 million). It directed the utility to frame future investment plans after assessing its implementation capacity.

The Commission also directed RVPN to constitute a technical committee comprising representatives from the Rajasthan Energy Department, RVPN, distribution companies, Rajasthan Urja Vikas Nigam & IT Services, and the State Load Despatch Centre to study the feasibility of segregating transmission costs between state and non-state use of intra-state transmission assets.

The committee may co-opt independent members from the Central Transmission Utility, Grid India, Northern Regional Load Despatch Centre, or other relevant entities. It must submit its report to RVPN within three months. RVPN must file the report with the Commission as part of its next annual revenue requirement or investment petition, after obtaining approval from the Rajasthan Energy Department.

Curtailments continue to be imposed in the state even after the 765 kV double-circuit Khetri–Narela interstate transmission line was commissioned in February 2025. A staggering 11.5 GW of renewable energy has been curtailed in Rajasthan since January 2026, with March alone accounting for 8.3 GW.

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