OERC Notifies Grid Support Charges Regulations 2026 For Captive Power Plants In Odisha

The Odisha Electricity Regulatory Commission (OERC) has notified new regulations to introduce Grid Support Charges (GSC) for Captive Generating Plants (CGPs) operating in parallel with the state electricity grid. The regulations, titled the “Odisha Electricity Regulatory Commission (Grid Support Charges for Captive Generating Plants) Regulations, 2026,” aim to create a clear and technically justified mechanism for recovering the cost of grid support services provided to conventional captive power plants in Odisha.

The main purpose of these charges is to compensate transmission licensees for the critical support they provide to CGPs that remain connected to the grid. Even when captive plants generate their own power, the grid continues to support them by maintaining voltage and frequency stability, supplying reactive power, absorbing harmonics, and providing fault-level support. These services help ensure the safe, stable, and reliable operation of captive plants. The regulations apply to all co-located conventional CGPs in the state, irrespective of whether they meet captive status requirements every year under existing electricity rules.

The regulations introduce the concept of a “control period” for determining and applying the charges. The first control period will run from April 1, 2027, to March 31, 2029. During this period, the Grid Support Charges will be calculated using the “Base MVA Support Method.” This method is designed to assess the minimum dependable support that a captive plant draws from the grid.

Under this approach, the monthly GSC payable by a captive plant will be calculated by multiplying its Base MVA by a uniform rate. The Base MVA is determined by taking the plant’s rated installed capacity and deducting its contract demand and any scheduled power exports under open access. If this calculation results in a negative figure, the Base MVA will be considered as zero, and no charge will apply on that basis.

The uniform GSC rate per MVA will be fixed by the Commission through a detailed formula. This formula considers the Annual Revenue Requirement of the Transmission Licensee, the total installed generation capacity in Odisha, and the fault-level contribution at the plant’s point of connection to the grid. To facilitate this process, the Transmission Licensee must submit an application for determination of the charges by November 30 of the year preceding the start of a new control period. Once approved and notified by the Commission, the rate will generally remain unchanged for the entire control period.

For billing and collection, the Distribution Licensee will raise monthly bills on eligible captive generating plants. The Grid Support Charges will be shown separately in the electricity bill. The Distribution Licensee is permitted to retain 2 percent of the collected amount towards administrative and collection expenses and must transfer the remaining amount to the Transmission Licensee within 30 days. Any delay in payment will attract a late payment surcharge of 1 percent per month.

The Commission has also reserved the authority to amend the regulations, relax specific provisions, or address implementation-related difficulties. In case of any dispute or interpretation issue, the decision of the Commission will be final and binding.