The Central Electricity Regulatory Commission (CERC) has proposed a new procedure that would give power developers more time to meet key project milestones, aiming to reduce project cancellations and protect valuable grid connectivity.
At present, under the GNA Regulations, developers are required to meet strict timelines for land acquisition, financial closure, and achieving the commercial operation date (COD). If these deadlines are missed, projects risk losing their connectivity to the inter-state transmission system, along with the forfeiture of bank guarantees. This often results in projects being terminated even when they are close to completion.
The Commission observed that many projects are already at advanced stages but face delays due to various reasons. Since transmission connectivity is a limited and important resource, the regulator is looking to manage such delays in a more structured way. To address this, it has introduced the concept of Milestone Extension Charges (MEC), which will allow developers to retain their connectivity by paying a fee for additional time.
To qualify for these extensions, developers must show measurable progress. For example, to seek an extension for submitting land documents, at least 20% of the required land must already be secured. For financial closure, projects under the “Land BG” route must have 50% of the land, while those under the “LOA/PPA” route must have secured at least 25%. For extensions related to COD, developers must have completed financial closure, awarded an EPC contract, and secured between 50% and 100% of land depending on the project category.
The charges for extensions will increase over time. For land-related delays, a base rate will apply in the first month, rising by 10% in the second month and 20% in the third month, with a maximum extension of three months. For financial closure, the base rate will remain constant for the first three months, after which it will rise progressively up to 30%, with a total extension limit of six months. For COD delays, the base rate will apply for six months, followed by gradual increases, and can go up to double the base rate for extensions between ten and twelve months. The maximum extension allowed for COD is twelve months.
The proposal also considers situations where delays are caused by the transmission system itself. If the substation is not ready, developers may not be able to carry out testing. In such cases, a two-month grace period will be provided after connectivity becomes effective, during which no charges will be applied.
Developers will need to apply for extensions at least 15 days before their deadlines and pay the charges in advance. If milestones are achieved earlier, the remaining amount will be refunded without interest. The collected funds will be transferred to the Deviation and Ancillary Services Pool Account. CERC has invited stakeholders to share their feedback on this proposal by April 30, 2026.
