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					</table>The Meghalaya State Electricity Regulatory Commission (<a href="https://mserc.gov.in/" target="_blank" rel="noopener">MSERC</a>) has notified the “Intra-State Deviation Settlement Mechanism (DSM) and Related Matters Regulations, 2025” applicable across the entire state.
The regulations aim to establish a structured commercial framework to manage deviations from the scheduled electricity injections or drawal by grid-connected entities. These rules <a href="https://www.mercomindia.com/cerc-draft-deviation-settlement-regulations" target="_blank" rel="noopener">align</a> with the Central Electricity Regulatory Commission’s (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) DSM Regulations, 2024, and aim to ensure grid reliability, frequency discipline, and equitable penalization of deviation-related imbalances.
Applicability and Scope 
The regulations apply to all grid-connected entities involved in intrastate electricity transactions. This includes conventional fuel-based generating stations owned by the Meghalaya Power Generation Corporation (MePGCL), other state generators, captive generating projects, renewable energy stations exceeding 5 MW capacity, and those participating through traders or exchanges in long, medium, or short-term contracts.
Distribution licensees within Meghalaya, open access consumers, and captive users drawing power through the state grid also fall under the DSM mechanism’s scope.
Computation of Deviation
Deviation for each 15-minute time block will be calculated as the difference between actual and scheduled generation or drawal. For general sellers, deviation will be measured both in MW and percentage terms, using the formula: deviation (in %) = 100 × (Actual – Scheduled)/Scheduled.
For wind and solar generators, deviation will be calculated against available capacity, and from April 1, 2026, it will be based on a hybrid method involving a Commission-notified (expected generation based on real-time operational potential) of available capacity plus the remaining scheduled generation.
For buyers, deviation will be computed in a similar manner as 100 × (Actual – Scheduled)/Scheduled.
The financial impact of deviation will be structured around the normal rate defined under Regulation 7 of CERC’s DSM Regulations, 2024. Charges for sellers and buyers will be determined by deviation quantum and prevailing grid frequency.
General sellers will be penalized up to 200% of the reference rate based on the deviation bands and frequency zones. In particular, over-injection during high-frequency conditions will receive lower payments, while under-injection during low-frequency conditions will attract higher penalties.
Category-wise Deviation Charges for Sellers and Buyers 
Run-of-river hydropower projects are paid at the reference rate for deviations of up to 15% and penalized up to 110% of the reference rate for higher under-injection. Wind and solar projects are categorised with VLwS(1) and VLwS(2) deviation thresholds.
Until March 2026, solar/hybrid generators are permitted 10% deviation at full payment, 10% to 15% at 90% rate, and no payment beyond that; wind is permitted 15% and 15% to 20% deviation at similar rates.
From April 2026, thresholds will tighten to 5% to 10% for solar and 10% to 15% for wind, with deviations beyond VLwS(2) attracting no payment for over-injection and a 200% penalty for under-injection.
Energy storage systems (ESS), including standalone or pumped hydro, will be treated on par with general sellers. Overdrawal during charging will be considered under-injection. Wind and solar plus ESS hybrid systems follow wind-solar category rules for injection and ESS rules for drawal. Infirm power from trial runs is not compensated, except for thermal plants during initial trial runs, capped at ₹2.86 (~$0.033)/kWh.
Startup and shutdown power is paid at the reference rate, contract rate, or the average clearing price of the day-ahead market (DAM), if applicable.
For buyers, deviation penalties are structured across VLB(1) to VLB(3) tiers. Normal buyers are allowed up to 10% or 100 MW deviation under VLB(1), while buyers under 400 MW or in renewable energy-rich states are allowed wider bands. Buyer underdrawals can earn incentives of up to 90% of the normal rate based on frequency, and overdrawals will attract penalties of up to 200% of the normal rate.
Deviation Charges
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-82687 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1.png" alt="MSERC image 1" width="794" height="594" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1.png 794w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1-300x224.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1-768x575.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1-650x486.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1-624x467.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-1-600x449.png 600w" sizes="(max-width: 794px) 100vw, 794px" /></a>
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<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-82688 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2.png" alt="MSERC image 2" width="819" height="292" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2.png 819w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2-300x107.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2-768x274.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2-650x232.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2-624x222.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-2-600x214.png 600w" sizes="(max-width: 819px) 100vw, 819px" /></a>
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-82689 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3.png" alt="MSERC image 3" width="780" height="201" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3.png 780w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3-300x77.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3-768x198.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3-650x168.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3-624x161.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-image-3-600x155.png 600w" sizes="(max-width: 780px) 100vw, 780px" /></a>
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-82694 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated.png" alt="MSERC Image 4 " width="772" height="732" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated.png 772w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated-300x284.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated-768x728.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated-650x616.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated-624x592.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/08/MSERC-Image-4-udated-600x569.png 600w" sizes="(max-width: 772px) 100vw, 772px" /></a>
Scheduling, Despatch, and Energy Accounting
Scheduling will be governed by the Meghalaya State Grid Code, CERC IEGC 2023, and the State Open Access Regulations, 2012. Sellers must declare daily capacity in 15-minute time blocks, and buyers must submit requirements accordingly.
The state load dispatch center (SLDC) will finalize schedules and issue dispatch instructions that are binding. Schedule revisions will be permitted on the day of operation.
In energy accounting, single supply consumers (SSC) with excess drawal, pay deviation charges. For SSCs with under-drawal, the charges will be settled via the DSM mechanism.
Settlement, DSM Account, and Financial Provisions
The SLDC will prepare and issue the State Deviation Settlement Mechanism Account (SDSMA) monthly. Bills must be issued within five working days of the month-end, with payment due within seven days. Delay in payment will attract an interest of 0.04% per day. SLDCs must disburse collected deviation charges within two days of receipt.
For repeat defaulters, the Commission mandates the submission of a letter of credit (LC) equivalent to 110% of average DSM dues for the preceding quarter. This limit can be increased if the deviation dues rise above 50%. SLDC can encash the LC and initiate proceedings against payment defaults.
Surplus of up to 90% from the DSM Pool Account will be used for grid reliability, operator training, and infrastructure upgrades, with prior Commission approval.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Meghalaya Notifies New DSM Regulations 2025 to Enforce Grid Discipline

The Maharashtra State Electricity Distribution Company (MSEDCL) has issued requests for selection (RfS) to procure 500 MW wind power from intrastate wind power projects and 300 MW wind power from grid-connected new inter-state and intrastate wind projects.
MSEDCL has floated the tenders to fulfill its non-solar renewable purchase obligation (RPOs) and meet its future power requirements. In 2019, the Maharashtra Electricity Regulatory Commission (<a href="http://www.mercindia.org.in/" target="_blank" rel="noopener">MERC</a>) had asked MSEDCL to fulfill its non-solar RPO by <a href="https://mercomindia.com/msedcl-buy-wind-power-expired-agreements/'" target="_blank" rel="noopener">procuring</a> wind energy from projects whose energy purchase agreements (EPAs) have expired.
500 MW Wind Power Procurement
The selection of projects will be carried out through e-bidding followed by an e-reverse auction process.
The last date for submission of bids is September 13, 2021. The ceiling tariff has been set at ₹2.65 (~$0.036)/kWh. Bidders are expected to pay ₹25,000 (~$336.71) towards the RfS document cost and ₹10,000 (~$136.68) as the processing fee.
Bidders must also submit ₹500,000 (~$6,734)/MW/project as earnest money deposit (EMD) in the form of a bank guarantee along with the RfS.
Intrastate projects that are already supplying power to MSEDCL under an existing EPA, which has expired or will expire on or before March 31, 2022, are eligible to participate in the bidding process.
The selection of projects would be technology agnostic. Only certified wind turbine models listed in the &#8216;revised list of models and manufacturers&#8217; (RLMM) will be allowed to repower wind turbine generators.
The successful bidder must install the real-time data visibility system as per the norms and conditions of the State Load Dispatch Centre (SLDC), Kalwa, within six months of executing the PPA with MSEDCL. The successful bidder must also comply with MERC regulations on forecasting, scheduling, and deviation settlement and are responsible for all liabilities related to connectivity.
300 MW Wind Power Procurement
The last date to submit the 300 MW wind power tender bids is September 20, 2021. Bidders are expected to pay ₹25,000 (~$336.71) towards the RfS document cost and ₹300,000 (~$4,044.29) as the processing fee.
Bidders must also submit ₹600,000 (~$8,088.58)/MW/project as earnest money deposit (EMD) in the form of a bank guarantee along with the RfS.
The selection will be carried out through e-bidding followed by an e-reverse auction process. For intrastate projects, wind power projects must have an individual size of 5 MW and above at one site with a minimum bid capacity of 25 MW.
For inter-state projects, the wind power projects must have an individual size of 50 MW and above at one site with a minimum bid capacity of 50 MW.
Grid-connected inter-state and intrastate and new wind projects are eligible to participate in the tender. The selection of projects would be technology agnostic and as per the RLMM.
Intrastate projects that are already commissioned but do not have any long-term PPA with any agency and are selling power on a short-term or merchant plant basis will be considered in case these projects are not already accepted under any other central or state programs and do not have any obligations towards existing buyers.
The net worth of the bidder for the financial year ended on March 31, 2021, must not be less than ₹12 million (~$161,778)/MW of the quoted capacity.
The bidder must have a minimum annual turnover of ₹2.5 million (~$33,704)/MW of the quoted capacity during the FY 2020-21.
Before depreciation interest and taxes, the bidder&#8217;s profit must be at least ₹1 million (~$13,482)/MW of the quoted capacity for FY 2022-21.
Foreign companies registered as companies as per the rules of their country of origin are eligible to participate. They can participate on a standalone basis or as a consortium member at the RfS stage.
If a foreign company participates on a standalone basis and wins the bid, it will have to form an Indian company as its fully owned subsidiary company before signing the PPA.
Common Clauses for 500 MW and 300 MW RfS
Successful bidders would supply power from their projects based on the terms of the new PPA from the date of the new PPA or after the expiry of the existing EPA, whichever is earlier.
The successful bidder is responsible for operating and maintaining the transmission network up to the delivery point and bear the cost. All approvals, permits, and clearances required for operating the project (including connectivity) and those required from government and local bodies are part of the scope.
The bidder must be incorporated in India under the Companies Act 1956, or the Companies Act, 2013, or the Co-operative Societies Act, 1912. The bidder must be a wind power generator with an EPA with MSEDCL that has expired or will expire in FY 2021-22.
Before signing the PPA, a successful bidder may also execute the project through a special purpose vehicle, i.e., a project company incorporated as a fully owned subsidiary company.
If the successful bidder is a consortium, it must incorporate a project company or an SPV with equity participation by the members in line with the consortium agreement before signing the PPA with MSEDCL.
Limited liability companies are also eligible to participate. If selected as successful bidders,  the LLC must register as a company under the Indian Companies Act, 1956 of Companies Act, 2013, as applicable, before signing the PPA while keeping the original shareholding of the LLC unchanged.
A bidder, including its parent, affiliate, or ultimate parent or any group company, can only submit a single application or bid for a single or multiple project location, subject to minimum bidding capacity.
Multiple bids from the same project from the same company, including its parent or ultimate parent or affiliates or group companies, would invalidate all the bids submitted by the group.
Recently, <a href="https://www.tatapower.com/" target="_blank" rel="noopener">Tata Power</a> and <a href="https://www.azurepower.com/" target="_blank" rel="noopener">Azure Power</a> were <a href="https://mercomindia.com/tata-power-azure-power-winners-msedcls-500-mw-hybrid-auction/" target="_blank" rel="noopener">declared</a> winners in MSEDCL&#8217;s auction to procure power from 500 MW of from grid-connected interstate and intrastate wind-solar hybrid projects on a long-term basis.

MSEDCL Floats Tender to Procure Power from 800 MW of Wind Power Projects

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