The Central Electricity Regulatory Commission (“CERC”) has notified the CERC (Sharing of Interstate Transmission Charges and Losses) (First Amendment) Regulations, 2023 on February 07, 2023 (“Amendment Regulations”), to amend the CERC (Sharing of Interstate Transmission Charges and Losses) Regulations, 2020 (“ISTS Regulations”) and to provide for sharing of ISTS charges by drawee DICs (as defined hereinafter), to set out a methodology for waiver of ISTS charges and to align the ISTS Regulations with the CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022 (“GNA Regulations”). Certain key provisions inserted through the Amendment Regulations have been summarized hereinbelow:

1.    Key definitions: The Amendment Regulations have inserted, inter alia, the following key definitions to the ISTS Regulations:

(a)    ‘Associated Transmission System’ or ‘ATS’ has been defined in conformity with the GNA Regulations which considers ATS as the augmentation required for the immediate evacuation of power of the applicant, excluding terminal bay;
(b)    ‘Drawee DIC’ has been defined to mean the DICs which draw power through ISTS but shall not include the ESS for sharing transmission charges under the ISTS Regulations; and
(c)    The terms “Medium-term open access and long-term open access to ISTS” have been substituted with GNA or GNA_RE or T-GNA or T-GNA_RE to ISTS, as applicable.

2.    Deleted definitions: The Amendment Regulations have deleted the definitions of Connectivity Regulations, 2009; Open Access Regulations, 2008; Target Region; and Untied LTA as they are not valid after the coming into force of the GNA Regulations. Further, the definition of Power Supply Regulations, 2010 has also been deleted as the said regulation has been repealed.

3.    Bills for transmission charges: The bills for sharing transmission charges will, notwithstanding the terms of the PPA, be raised on the Drawee DICs. However, the transmission charges will be settled inter se between the Drawee DICs and the generating station or the seller as per the power purchase agreement or mutual agreement between the parties.

4.    Transmission charges: 

(a)    The implementing agency under the ISTS Regulations (“IA”) shall aggregate the transmission charges obtained at drawal nodes located within the state control area using the methodology set out in Regulation 9 of the ISTS Regulations, for computing transmission charges for the state under AC-UBC. 

However, for the drawee DICs located within the state control area and having separate general network access (“GNA”) and the drawee DIC which is a regional entity, transmission charges shall be apportioned under AC-UBC as per the charge obtained at their respective drawal node and will not be included in the aggregate transmission charges of the state. 

(b)    The IA shall publish T-GNA rates, i.e., rates for open access to the ISTS granted as per the GNA Regulations, for each billing month and shall be calculated state-wise as per the following formula:
[Transmission charges for all drawee DICs in the state for the billing period (in rupees)] x 1.10/ [number of days in a month x 96 x GNA and GNA_RE quantum (in MW), for all drawee DICs for the corresponding billing period]

(c)    Entities having obtained T-GNA or T-GNA_RE (i.e., for renewable energy) under the GNA Regulations will be required to pay transmission charges as per the rate so determined. Further, the Drawee DICs will be reimbursed the transmission charges in proportion to their share basis adjustment as per the ISTS Regulations.               

5.    Transmission deviation: The Amendment Regulations have set out the method for computing transmission deviation (hereinafter “TD”) as follows:

(a)    For generating station, including ESS and captive generating plant, TD is net metered ex-bus injection in a time block exceeding the entity’s GNA. 

However, schedules for overload capacity as permissible under the CERC (Indian Electricity Grid Code) Regulations, 2010, during peak season are not to be considered for hydro generating stations. TD charges will not be levied for over-injection as a primary response by a generating station, subject to its verification by the regional power committee (“RPC”). Further, each RPC will issue necessary guidelines for furnishing of primary response data by generating stations. 

For a state, TD in a time block will be the net metered drawal exceeding the sum of GNA and T-GNA for all drawee DICs being intra-state entities in the concerned state. However, for a state having net metered injection in a time block, TD in a time block is net metered drawal exceeding sum of (i) GNA for all drawee intra-state entities in the state; (ii) GNA for injecting intra-state entities; and (iii) T-GNA for injecting intra-state entities.

(b)    For a drawee DIC, being a regional entity and not covered in state GNA, TD will be net metered drawal exceeding the sum of GNA and T-GNA of the entity. For such an entity, having GNA_RE or T-GNA_RE, TD in a time block is net metered drawal exceeding scheduled drawal under GNA_RE and T-GNA_RE from identified sources.

However, if such entity obtains additional GNA or T-GNA, for drawing power from sources other than as identified in Regulation 13(2) of the ISTS Regulations, TD in a time block will be net metered drawal exceeding the sum of scheduled drawal under GNA_RE T-GNA_RE from identified sources, quantum of GNA and quantum of T-GNA.

6.    Transmission deviation rate: The transmission deviation rate in Rs./ MW for state or any other DIC located in the state for a time block during a billing month is computed as follows:

[1.25 x (total transmission charges for all drawee DICs located in the state]/ [GNA and GNARE quantum in MW of such entities in the state, considered for billing, for the corresponding billing period x number of days in a month x 96)]

7.    Transmission charges and losses: 

(a)    Regulation 13(1) of the ISTS Regulations has been amended to substitute the word “transmission charges and losses” with “transmission losses” such that the exemption for use of ISTS is only available with respect to payment for transmission losses. 
(b)    Further, for generation based on solar or wind power resources, the applicable period for which generation capacity has been declared under commercial operation has been extended to June 30, 2023 or the date of operation of the Amendment Regulations.
(c)    A new sub-clause (d) has been inserted in Regulation 13(1) to make generation based on solar, wind, solar-wind hybrid, hydro-pumped storage projects (“PSP”) and battery energy storage systems (“BESS”) projects whose bidding was completed on or before 15.1.2021 and which are declared under commercial operation within the date specified in their respective PPAs, eligible for exemption from payment of transmission losses.

8.    Waiver of transmission charges: Regulation 13 of the ISTS Regulations has been amended to provide a waiver of transmission charges for using ISTS for scheduling power under GNA, GNA_RE T-GNA and T-GNA_RE from:

(a)    Renewable energy generating systems (“REGS”) or renewable hybrid generating systems (“RHGS”) based on wind/ solar sources; or
(b)    Energy storage system (“ESS”) charged from REGS or RHGS; or
(c)    Generation based on hydro power sources.

However, the waiver is subject to the fulfillment of the following conditions:

(a)   Waiver of 25 years for REGS/ RHGS based on wind or solar sources or hydro PSP ESS and undertaking commercial operation up to June 30, 2025.
(b)   Waiver of 12 years for BESS charged with REGS/ RHGS based on wind or solar sources and undertaking commercial operation up to June 30, 2025.
(c)   ESS shall be given ISTS waiver if it meets a minimum of 51% of its annual electricity requirement for pumping water or charging battery with electricity sourced from REGS/ RHGS based on wind or solar sources.
(d)   Waiver of 25 years from the commercial operations date (“COD”), for solar photovoltaic generating station under SECI manufacturing linked capacity scheme for selling power to entities having renewable purchase obligation. 
(e)   Waiver of 18 years from the COD, for hydro generating station where PPAs are signed between December 01, 2022 and June 30, 2025 and construction work is awarded on or before June 30, 2025.
(f)   REGS/ RHGS based on wind or solar sources, hydro PSP ESS or B ESS declared operational after June 30, 2025 and up to June 30, 2028 or hydro projects for which construction work is awarded and PPA is signed after June 06, 2025 will be given ISTS waiver based on the period of COD and percentage of drawal schedule from identified generating station or ESS.

9.    Payment of transmission charges: 

(a)    Delay where connectivity is granted under GNA Regulations
Where a connectivity grantee, other than a renewable power park developer, delays the COD on or before the start date of connectivity as per GNA Regulations, and the ATS has achieved COD not earlier than the start date of connectivity, the connectivity grantee shall pay yearly transmission charges for the ATS corresponding to the capacity not having achieved COD.

Where a connectivity grantee is a renewable power park developer and the generation capacity within the renewable power park has not declared COD on or before the start date of connectivity in terms of GNA Regulations, and ATS has achieved COD not earlier than the start date of connectivity, the renewable power park developer shall pay yearly transmission charges for the ATS corresponding to generation capacity not having achieved COD.

However, the yearly transmission charges for the ATS corresponding to the connectivity capacity having achieved COD shall be included to determine transmission charges of DICs as per Regulations 5 to 8 of the ISTS Regulations.

(b)    Where one or more transmission elements of the ATS have achieved COD before the COD of the ATS and the connectivity grantee has sought part effectiveness of its connectivity as per the GNA Regulations, yearly transmission charges for the transmission elements of the ATS shall be included to determine transmission charges of DICs as per Regulations 5 to 8 of the ISTS Regulations.

(c)    Where a connectivity grantee other than a renewable power park developer, on margin of existing system or on the augmented system with no ATS, delays COD beyond the start date of connectivity, it shall pay transmission charges from the start date of such connectivity at the rate of Rs. 3000/MW/month, corresponding to the delayed capacity. 

Where a connectivity grantee being a renewable power park developer has not declared COD on or before the start date of connectivity as per the GNA regulations, it shall pay transmission charges from the start date of such connectivity at the rate of Rs. 3000/MW/month, corresponding to the generation capacity not achieved.

The drawee DICs will be reimbursed the amount received in a billing month, in proportion to their share in the first bill in the following month. 

(d)    The connectivity grantee is also liable to pay yearly transmission charges where a dedicated line has been or is being constructed by an inter-state transmission licensee under coordinated transmission planning of the Central Transmission Utility, and COD has not been achieved by the connectivity grantee on or before COD of the dedicated transmission line. Such charges will be payable till COD is achieved and thereafter, yearly transmission charges for the dedicated transmission line will be considered as per Regulations 5 to 8 of the ISTS Regulations.

(e)    A regional entity generating station drawing power before the COD or drawing auxiliary power before or after COD through ISTS, will be required to pay transmission charges at the T-GNA rate for the state in which it is located. The amount received in a billing month will be reimbursed to the drawee DICs pro-rated to their share in the first bill in the following month.

(f)    In case of a transmission system for which COD is approved as per the Tariff Regulations, 2014 and 2019 or where COD is deemed to have been declared as per the transmission service agreement under tariff based competitive bidding, the yearly transmission charges for the transmission system is, in addition to the persons enlisted in Regulation 13(12) of the ISTS Regulations, payable by the following:

(i)   respective drawee DIC(s) of the state whose intra-state transmission system is delayed, till COD is achieved.
(ii)   the bulk consumer or distribution licensee having approval to directly connect to ISTS, whose connecting transmission line is delayed, till such line connection is obtained.
(iii)   the ESS whose project is delayed, till COD is achieved.
(iv)  the renewable power park developer whose Park is delayed, till it is connected to ISTS.

Please find a copy of the Amendment Regulations, here.

This update has been contributed by Rachika Agrawal Sahay (Partner), Siddhant Satapathy and Sakshi Sharma (Associates).

Argus Knowledge Centre is now on WhatsApp! Send us a message on +91 8433523504 to receive updates from our Knowledge Centre.