Gujarat Commission Rejects SLDC Petition For Additional Deviation Charges

In Gujarat, the State Load Despatch Centre (SLDC) submitted a petition for a mechanism to recover charges from entities deviating from their scheduled electricity supply. This petition was filed under consideration by the Gujarat Electricity Regulatory Commission (GERC). The SLDC claimed that entities not adhering to their schedules led to imbalances in the grid, necessitating interventions that incurred additional costs.

Several respondents, including major electricity companies like Gujarat Urja Vikas Nigam Limited, Torrent Power Limited, and Adani Power Limited, were involved in the case. Many of these respondents, however, did not have representatives present during the hearings.

The GERC noted that the SLDC had been following the scheduling and dispatch services for Gujarat since 2010. However, they only approached the commission in 2015 with this petition, using what the commission described as obscure illustrations. During this period, significant developments occurred in the energy sector, including the emphasis on renewable energy and waste-to-energy projects as highlighted in the National Tariff Policy 2016 and Gujarat’s Waste to Energy Policy.

The SLDC sought to establish a system for compensatory charges from entities causing deviations that led to over or under-draw conditions. They argued that such deviations forced them to direct non-scheduled generating companies to inject power at higher tariffs. This increased cost of electricity was ultimately passed on to the consumers by the distribution companies. However, the SLDC itself did not incur monetary losses from these non-scheduled injections but was responsible for maintaining the balance of electricity injection and drawal within the state.

The commission highlighted that the SLDC’s primary role is statutory, involving the collection of fees and charges from deviating entities as specified by the state commission. The GERC adopted the Central Electricity Regulatory Commission’s (CERC) regulations on Deviation Settlement Mechanism (DSM) and related matters in Gujarat in February 2014, thus limiting the SLDC’s role in following these regulations.

The SLDC’s petition was contested on several grounds. It was argued that under the Electricity Act, 2003, the petition could only be maintainable in the event of a dispute between licensees and generating companies. Since the SLDC is neither, and no such dispute was present, the petition was considered not maintainable. Additionally, the SLDC’s request for amendments to the DSM regulations, which were initially adopted from the CERC, was seen as beyond the jurisdiction of the state commission.

The respondents also pointed out that the SLDC’s concerns about grid discipline and the actions of certain generating stations involved in inter-state transactions unfairly targeted intra-state entities. They argued that these issues should be re-evaluated considering the current developments in the energy sector.

Ultimately, the commission observed that the deviations cited by the SLDC were managed through existing regulations, and no incidents of non-compliance had been reported. The GERC’s decision to adopt the CERC’s DSM regulations was based on thorough consideration and ongoing information from the SLDC. Therefore, the SLDC’s petition for additional compensatory mechanisms was deemed unnecessary and not maintainable under the current legal and regulatory framework.

This case underscores the complexities of managing grid stability and the regulatory mechanisms needed to balance supply and demand in the electricity sector. It also highlights the importance of evolving policies to keep pace with advancements and shifts in the energy landscape.

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