The Himachal Pradesh Electricity Regulatory Commission (HPERC) has issued draft regulations for amending the “Deviation Settlement Mechanism and Related Matters” regulations, known as the HPERC (Deviation Settlement Mechanism and Related Matters) (First Amendment) Regulations, 2024. The draft regulations were published for public feedback in Rajpatra, Himachal Pradesh, on the 2nd of December, 2024.
The amendment primarily targets two aspects of the regulations, aiming to address issues related to the shortfall in the Deviation Settlement Mechanism (DSM) pool account. The first amendment relates to Regulation 10, which deals with the charges payable by various state entities under the DSM.
According to the draft, the amendment seeks to remove the 50% capping on deviation charges. Previously, the deviation charges payable by various state entities under Regulation 7 could not exceed a certain limit. The amendment proposes that if the amount of deviation charges payable by the state entities falls short of the total amount due, the shortfall should be covered by increasing the amounts payable by the state entities proportionately for that day. This adjustment will be carried out daily and will be based on the total amount due for that specific day, without considering netting off with amounts receivable by those entities.
The second amendment targets Regulation 12, which outlines the payment timelines for deviation charges. The amendment proposes that all payments due to buyers or sellers, entitled to receive amounts as per the bills issued by the State Load Despatch Centre (SLDC), should be made within four working days after receiving the payments in the “State Deviation Pool Account” from the concerned state entities. In cases of delay beyond four working days, the buyer or seller will be entitled to receive simple interest at the rate of 0.04% per day. Furthermore, if the payment is delayed for more than eight days, the payments to buyers and sellers will be made from the balance available in the State Deviation Pool Account. If the pool account balance is insufficient, the payment will be made on a pro-rata basis from the Fund referred to in Regulation 15.
The amendment is being made following a reference received from the Himachal Pradesh State Load Despatch Centre (HPSLDC). The HPSLDC had pointed out that a deficit in bills for Deviation Settlement could not be recovered from the relevant intra-state entities due to the 50% capping on charges under Regulation 10 of the principal regulations. To avoid penalties arising from the deficit in the DSM pool account, the commission has proposed the removal of this capping to ensure a smoother settlement of deviations.
The Commission has stated that these amendments are being made in the exercise of the powers conferred by the Electricity Act, 2003. The draft amendments have been published for public consultation, and the Commission has invited objections or suggestions on the proposed changes. The public is invited to submit their feedback within thirty days from the date of publication of this draft amendment in the Rajpatra. The text of the draft amendment is available on the official website of HPERC.
This amendment aims to provide a more efficient and effective mechanism for the settlement of deviations and ensure that the DSM pool account functions without deficits. The changes, if implemented, will help improve the overall financial stability of the state’s electricity sector and create a more reliable system for the payment and settlement of charges related to deviations in power supply and demand.
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