CERC Approves Tariff For PGCIL NRSS-XL Transmission Assets In Northern Grid Strengthening

The Central Electricity Regulatory Commission (CERC) issued its order on 23 September 2025 in Petition No. 52/TT/2023 filed by Power Grid Corporation of India Limited (PGCIL). The case was related to the approval of transmission tariffs for assets developed under the Northern Region System Strengthening-XL (NRSS-XL) project. The assets covered a wide range of transformers, interconnecting transformers (ICTs), and bus reactors installed at substations across states such as Rajasthan, Uttar Pradesh, Haryana, Himachal Pradesh, Punjab, Uttarakhand, Jammu & Kashmir, and Delhi.

The investment approval for the project was given in February 2019 at an estimated cost of ₹57,298 lakh, which included interest during construction. The project involved the augmentation of transformers, bay extension works, and reactive compensation through the installation of reactors at various substations. The scheme was finalized through a series of meetings of the Northern Region Standing Committee on Transmission, the National Committee on Transmission, and the Northern Regional Power Committee.

PGCIL sought approval for tariffs for 29 different assets, including 500 MVA ICTs at Bhadla, Saharanpur, Roorkee, Sonepat, and Fatehpur; 315 MVA ICT at Gorakhpur; and 125 MVAR and 25 MVAR bus reactors at substations such as Sikar, Mandola, Meerut, Hisar, Jind, Fatehabad, Kishenpur, Jallandhar, Amritsar, Moga, Patiala, Maharanibagh, and Allahabad. Some assets were commissioned between 2020 and 2022, while a few had their commercial operation dates (CODs) claimed under Regulation 5(2) of the 2019 Tariff Regulations since the downstream systems were not ready.

The petition also requested condonation of delays in commissioning, approval of additional capitalization, reimbursement of expenses like filing and publication fees, and recovery of charges such as licensee fee, RLDC charges, and GST. PGCIL further sought permission to adjust interest on loans due to changes in floating rates, claim security expenses separately, and recover any taxes or duties imposed in the future.

Several respondents, including state utilities such as UPPCL, PTCUL, UPPTCL, HVPNL, and private players like Essel Saurya Urja Company of Rajasthan Ltd., raised objections. Concerns were expressed about delays in commissioning, mismatches in downstream systems, cost variations, and the sharing of transmission charges. These objections were countered by PGCIL through affidavits and rejoinders filed in 2023 and 2024.

After hearings held in September and October 2024, the Commission examined the claims and responses. It considered issues of deemed COD, delays caused by uncontrollable factors, and the need for reactive compensation for grid stability. The Commission also reviewed the claimed annual fixed charges (AFC) for each asset, which included components such as depreciation, return on equity, interest on loan, O&M expenses, and interest on working capital. For example, the AFC for Asset-1 at Bhadla was projected at ₹579.13 lakh in 2023-24, while for Asset-3 at Bhadla it was ₹1,052.11 lakh in the same year.

The order highlighted the importance of strengthening transmission infrastructure in the northern region to handle growing renewable energy integration, especially from solar hubs like Bhadla. By approving the tariff determination, the Commission ensured cost recovery for PGCIL while also addressing the concerns of beneficiaries about efficiency and timely completion.

This case reflects how large-scale transmission projects are regulated in India, balancing the need for investment in grid stability with accountability on costs, timelines, and stakeholder concerns.