PSERC Issues Draft Regulations For Deviation Settlement Mechanism 2025 To Strengthen Grid Discipline In Punjab

The Punjab State Electricity Regulatory Commission (PSERC) has issued a Draft Notification introducing the Punjab State Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2025. These regulations are framed under the powers granted by the Electricity Act, 2003, and aim to ensure grid discipline, security, and accountability among power system participants across Punjab.

The draft outlines a detailed framework for deviation settlement, ensuring that electricity sellers and buyers adhere to their scheduled generation and drawal limits. The mechanism is designed to discourage imbalances in power injection or withdrawal, maintaining the stability and reliability of the state grid. It will apply to all sellers with an installed capacity of 5 MW and above, including renewable energy generators (excluding wind and solar), open access generators, and captive power plants connected to the intra-state transmission system. Buyers, including distribution licensees and full open-access consumers, will also fall under its scope.

The regulations define key terms such as “Deviation,” “Actual Injection,” “Buyer,” “Seller,” “Ancillary Services,” and “State Deviation Pool Account.” The State Load Despatch Centre (SLDC) will play a crucial role in implementing the regulations by coordinating scheduling, dispatch, metering, and deviation accounting. All entities must inform SLDC of their energy contracts and operate in accordance with the State and Indian Electricity Grid Codes.

Deviation will be calculated every 15 minutes (time block), and charges will be settled weekly. The framework sets the Normal Rate of Charges for Deviation (NR) based on the highest of three parameters: the weighted average Area Clearing Price (ACP) of the Day Ahead Market, Real Time Market, and Ancillary Service charges. These rates ensure that deviation pricing reflects real market conditions.

For sellers, deviations beyond permissible limits will attract financial penalties depending on system frequency and the degree of deviation. Similarly, buyers drawing more or less than their scheduled quantity will be liable for deviation charges linked to grid frequency. Standalone energy storage systems will be treated as generators for settlement purposes, with their charging and discharging modes appropriately accounted for.

SLDC will prepare the State Energy Account every month and a weekly Deviation Settlement Account, detailing payables and receivables for each participant. All deviation-related payments will be deposited into a State Deviation Pool Account, which will be maintained and operated by SLDC. Surplus funds from this pool may be used for improving grid operations, capacity building, and reliability enhancement, with Commission approval.

Participants must make deviation payments within ten days of SLDC’s statement, failing which interest at 0.04% per day will apply. Entities with repeated defaults will be required to maintain a Letter of Credit covering 110% of their average weekly deviation liability. In severe cases of non-payment, SLDC may encash the Letter of Credit, and persistent defaulters could face action under Section 56 of the Electricity Act.

A governance mechanism has also been proposed. The State Grid Code Review Committee (SGCRC) and Commercial & Metering Committee (CMC) will oversee compliance and resolve disputes. Additionally, a Punjab State Power Committee may be established to monitor implementation, coordinate energy exchanges, and recommend improvements to the Commission.

The draft regulations repeal the Punjab State Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2020, while retaining actions taken under them to the extent they are consistent with the new provisions.

The Commission has invited stakeholder comments before finalizing the regulations, which are expected to come into force from a date to be separately notified. The proposed framework marks a significant step in strengthening operational discipline and commercial accountability within Punjab’s power sector.