CERC Issues Guidelines for Inter-State Transmission Charges and Losses

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The Central Electricity Regulatory Commission (CERC) has recently issued new guidelines for inter-state transmission charges and losses.

The notice states that “These regulations may be called the Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2020 and these regulations shall apply to all Designated ISTS Customers (DICs), Inter-State Transmission Licensees, National Load Despatch Centre (NLDC), Regional Load Despatch Centres (RLDCs), State Load Despatch Centres (SLDCs) and Regional Power Committees (RPCs). These regulations shall come into force from the date which will be separately notified by the Commission.”

The transmission charges shall be shared amongst the DICs every month based on the Yearly Transmission Charges such that:- the Yearly Transmission Charges are fully recovered, and Any adjustment on account of revision of the Yearly Transmission Charges are recovered. Yearly Transmission Charges for transmission system shall be shared every month by DICs.Long Term Access or Medium Term Open Access for projects shall not be considered for apportionment of Yearly Transmission Charges.

According to the order, Transmission charges for DICs shall have the following components:

 a. National Component (NC);

 b. Regional Component (RC)

c. Transformer Component (TC)

d. AC System Component (ACC). 

National Component shall be the sum of the following components: (a) National Component-Renewable Energy (NC-RE); and (b) National Component-HVDC (NC-HVDC) and shall comprise the Yearly Transmission Charges for transmission systems developed for renewable energy projects as identified by the Central Transmission Utility.

Transmission charges for Short Term Open Access shall be payable by generating stations and embedded entities located in the State, as per the last published Short Term Open Access Rate for the State, along with other charges or fees as per Open Access Regulations, 2008 and the Transmission Deviation charges, if any, as per these regulations.

According to the notice, No transmission charges and losses for the use of ISTS shall be payable for generation based on solar power resource for the useful life of the projects commissioned during the period from 1.7.2011 to 30.6.2017. Similarly, no charges will be applicable from 1.7.2017 to 12.2.2018 for solar-based resources or during the period from 30.9.2016 to 12.2.2018 for wind-based resources. Also, the transmission charges and losses for solar and wind projects during the period from 13.2.2018 to 31.12.2022 will be waived off.

The bills for transmission charges for the DICs shall be raised by the Central Transmission Utility under the following three categories: The first bill of each billing month shall contain the transmission charges for the billing period per Regulations 5 to 8 of these Regulations. The second bill shall be raised in the months of April, July, October, and January every year for the quarter ending on 31st March, 30th June, 30th September and 31st December respectively to adjust variations on account of any revision in transmission charges allowed by the Commission, including incentives as applicable: Provided that under-recovery or over-recovery of any amount on account of such revision in transmission charges in respect of a billing period shall be billed by the Central Transmission Utility to DICs in proportion to their first bill in the relevant billing month. The third bill shall be raised in each billing month for Transmission Deviation charges, along with the first bill.

In concern with the due date notice states that “Notwithstanding any provision to the contrary in the applicable Tariff Regulations or Transmission Service Agreement under tariff-based competitive bidding, due date concerning any bill raised by the Central Transmission Utility under these regulations shall mean the forty fifths (45th) day from the date of presentation of such bill”.

 A rebate of 1.50% shall be allowed for payment of bills within a period of 5 days of presentation of bills and a rebate of 1% shall be allowed where payments are made on any day after 5 days and within a period of 30 days of presentation of bills.

The Central Transmission Utility shall have at three months before the date of 25 operationalization of Long Term Access or Medium Term Open Access, in respect of a DIC, give notice to such DIC, indicating the date of operationalization of such Long Term Access or Medium Term Open Access and requiring the DIC to furnish an irrevocable, unconditional and revolving Letter of Credit. Not later than 1 month before the date of the operationalization of Long Term Access or Medium Term Open Access, the DIC shall open such a Letter of Credit or provide such an acceptable instrument of payment security mechanism that shall be operative from a date before the Due Date of its first bill.

In case tripartite agreement for securitization on account of arrears against the transmission charges with the Government of India exists, the Letter of Credit or the acceptable instrument of payment security mechanism shall have a term of 12 months and shall be for an amount equal to 1.05 times the average amount of the first bill of a year.

If a DIC fails to pay any bill or part thereof by the Due Date, the Central Transmission Utility may encash the Letter of Credit or recover through such other 26 instruments of payment security mechanism provided by the DIC, the amount of the bill or part thereof that is overdue plus Late Payment Surcharge, if applicable.

The notice highlighted that failure on the part of a DIC to make the payment, in full, against the bills by the due date under these regulations shall make such DIC liable for action for any or combination of the following, by the Central Transmission Utility, on behalf of the inter-State transmission 28 licensee(s): (a) regulation of power supply per the Power Supply Regulations 2010; (b) denial of Short term Open Access by RLDC or NLDC per the Open Access Regulations, 2008; (c) suspension or termination of Long Term Access or Medium Term Open Access per Connectivity Regulations, 2009.

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