The Haryana Electricity Regulatory Commission (HERC) has released draft regulations on the Deviation Settlement Mechanism and related matters. Stakeholders can submit their feedback by February 11, 2025.

The Commission aims to maintain grid discipline and security through the commercial mechanism for deviation settlement.

The draft regulations will apply to the transactions of electricity conveyance through short, medium, or long-term open access using intra-state transmission systems (including inter-state wheeling of power), subject to the following conditions:

• The regulations will apply to open access generators and regenerators with a capacity of 10 MW and above
• They will apply to buyers, including distribution licensees, deemed distribution licensees in the state, and fully open access consumers connected to the intra-state transmission system

State entities must inform the State Load Despatch Center (SLDC) of all energy exchange contracts. They must also operate their generating projects and loads under the Indian Electricity Grid Code and the Haryana State Electricity Grid Code.

The deviation settlement mechanism’s framework will cover the scheduling period, guiding principles for scheduling and despatch, deviation, settlement period, and the measurement unit for state deviation pool account premise for allocation of losses.

The scheduling period comprises a time block, with the first block starting at 00.00 hours and ending at 24:00 hours. The Northern Regional Load Despatch Centre and the Northern Regional Power Committee will adhere to the time blocks.

Buyers and sellers will be guided by the scheduling and dispatch procedure to be formulated by the SLDC under the provisions of the Haryana State Grid Code.

For deviation settlement amongst state entities, the SLDC will calculate the deviation for the ‘State Deviation Pool Account,’ comprising over/under-drawal and over/under-injection for each state entity corresponding to each scheduling period.

Buyers and sellers, who are state entities, will be responsible for the charges, which must be determined according to the provisions of the final regulations.

The Commission can initiate proceedings against any generating company or seller on gaming charges and may order an inquiry against them.

Settlement

For computing the normal rate of charges for deviation for a specific time block, it should be the highest of the following:

• The weighted average Area Clearing Price (ACP) (in paise/kWh) of the integrated day-ahead market segments of all the power exchanges
• The weighted average ACP (in paise/kWh) of the real-time market segments of all the power exchanges
• The sum of one-third of the weighted average ACP (in paise/kWh) of the integrated-day ahead market segments of all the power exchanges or one-third of the weighted average ACP (in paise/kWh) of the real-time market segments of all the power exchanges and one-third of the ancillary service charge (in paise/kWh) computed based on the total quantum of ancillary services

The SLDC will prepare a monthly state energy account statement for each time block for sellers and buyers.

It will pass the data required for billing open access consumers to the distribution licensee’s billing center, which will oversee energy accounting, raising bills, and settlement with open access consumers.

The SLDC will bill and collect deviation charges and prepare weekly deviation charge statements for all state entities.

It will prepare and submit a detailed energy accounting procedure to the Commission for approval.

All payments made following the deviation charges levied under these regulations and interest, if any, received for late payment will be credited to the “State Deviation Pool Account,” funds maintained and operated by the SLDC.

The SLDC will maintain separate books of accounts for the principal and interest components of deviation charges.

The deviation charges are a high priority and must be paid within seven days.

Governance Structure

Within three months from the date of notification of these regulations, the SLDC will formulate operating procedures and business rules for the constitution of the State Power Committee, which the State Commission will approve.

The State Power Committee will:

• Coordinate and facilitate the intra-state energy exchange to ensure optimal utilization of resources.
• Monitor compliance with the regulations by state entities.
• Guide the SLDC in modifying the procedures to address any implementation difficulties.
• Provide necessary support and advice to the Commission for suitable modifications/issuance of operating procedures, practice directions, and amendments to the regulations’ provisions, if necessary.

The Commission can vary, alter, amend, or modify any provisions of the regulations.

Last year, the Appellate Tribunal for Electricity quashed the HERC’s decision to reject power purchase agreements (PPA) for 150 MW solar projects. The Tribunal directed HERC to approve the PPAs at a revised tariff of ₹5.68 (~$0.068)/kWh, in line with the Central Electricity Regulatory Commission’s tariff for 2016-17.

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