CERC Issues Guidelines for Inter-State Transmission Charges for Solar and Wind Projects

The Central Electricity Regulatory Commission (CERC) has issued new guidelines for inter-state transmission charges and losses. The guidelines shed light on the responsibilities of the nodal agencies and the calculation of inter-state transmission charges and losses for solar and wind projects.

These regulations will apply to all designated ISTS customers (DICs), interstate transmission licensees, national regional, and state load dispatch centers, along with regional power committees (RPCs).

The ISTS customers include the generating stations, state transmission utilities (STU), distribution licensees, including state electricity boards, electricity departments, and any other entity directly connected to the ISTS.

As per the regulations, the yearly transmission charges will be shared monthly by the DICs per these regulations. The sharing and transmission charges will be based on the commercial information provided by the customers to the implementing agency.

According to the regulations, the transmission charges will have the following components:

  • National Component (NC), which is a sum of renewable energy and high voltage direct current components
  • Regional component (RC)
  • Transformer component (TC)
  • AC system component (ACC)

The transmission charges for short-term open access will be payable by generating stations and entities located in the state, as per the last published open access regulations, 2008.

According to the regulations, no transmission charges and losses for the use of ISTS will be payable for solar projects that have been commissioned during the period from July 01, 2011, to June 30, 2017. Similarly, no charges will be applicable for solar projects that have been commissioned between July 01, 2017, and February 12, 2018. Wind projects that have been commissioned during September 30, 2016, and February 12, 2018, will also be exempt.

Also, the transmission charges and losses will be waived off for solar and wind projects commissioned between February 13, 2018, and December 31, 2022. As per the regulations, the power purchase agreements (PPAs) for the sale of power by these renewable generation sources to the distribution companies (DISCOMs) should have been executed.

The order states that a  rebate of 1.5% will be allowed for payments of bills within five days of the presentation of the bill, and a rebate of 1% will be allowed when payments are made on any day after five days and within 30 days.

In case the payment of the bill is delayed, a late payment surcharge at the rate of 1.5% per month will be payable.

The central transmission utility will, at least three months before the date of the operationalization of long-term access or medium-term open access, give a notice to the ISTS consumer asking to furnish a revolving Letter of Credit. Not more than one month before the date of the operationalization of long-term access or medium-term open access, the ‘Letter of Credit’ will be operative.

In case of a tripartite agreement, the Letter of Credit will have a term of 12 months and will be equal to 1.05 times the average amount of the first bill of a year.

If the customer fails to make the payment, it will be liable for the denial of short-term open access. It might also lead to suspension or termination of long-term access or medium-term open access in accordance.

In November last year, the Ministry of Power (MoP) had announced that ISTS charges and losses on the transmission of electricity generated from solar and wind energy projects would be waived as long as they are commissioned before December 31, 2022. In a previous order issued in February 2018, the ministry had said that the charges for the transmission and losses would be waived for projects which were commissioned before March 31, 2022.

Previously, Mercom had reported that CERC had issued a notification for an amendment in the regulation for sharing of the ISTS charges and losses. The notification stated that no transmission charges and losses for the use of the ISTS network would be payable for the generation based on solar and wind power resources for 25 years from the date of commercial operation.