Odisha Proposes Revisions to Deviation Settlement Regulations

Listen to this article

The Odisha Electricity Regulatory Commission (OERC) has issued the revised draft ‘Deviation, Settlement Mechanism, and Related Matters Regulations, 2022’ to ensure that users of the grid adhere to their schedule of drawal and injection of electricity for the security and stability of the grid.

Stakeholders have time until November 18, 2022, to submit their suggestions.

The regulations will apply to sellers and buyers involved in the transactions of electricity using intrastate transmission or distribution systems facilitated through short-term open access, medium-term open access, or long-term access.

The regulations will apply to all sellers with an installed generating capacity of 1 MW and above and scheduling their power through the state load despatch center (SLDC).

The deviation settlement mechanism will also apply to all buyers, including distribution licensees and consumers connected to the intrastate transmission system.

Charges for deviations

The normal rate of charges for deviation for a time block will be equal to the highest of the weighted average area clearing price of the Day-Ahead Market segments of all the power exchanges or the weighted average area clearing price of the Real-Time market segments.

In the case of the non-availability of area clearing price for any time block on a given day, the area-clearing price for the corresponding time block of the last available day will be considered.

No charges for over-injection

In the case of over-injection, the wind-solar seller will not have to pay deviation charges. Such a seller will be paid back for over-injection at the contract rate, or in the absence of a contract rate, at the weighted average area clearing price of the Day-Ahead Market segments of all power exchanges for the respective time block, up to a 5% deviation.

Such a seller will be paid back at 90% of the contract rate or, in the absence of a contract rate,  90% of the weighted average area clearing price of the Day-Ahead market segments for deviation beyond 5%.

For under-injection, the seller will not have to pay any deviation charges for deviations up to 10%. For deviation beyond 10%, the seller will have to pay 10% of the normal rate of deviation charges. Such a seller will pay back for the total shortfall in energy against its schedule in any time block at the contract rate, or in the absence of a contract rate, at the weighted average area clearing price of the Day-Ahead Market segments for the respective time block.

Accounting of charges   

By every Thursday, SLDC will provide data for deviation calculated as per the regulations. After receiving the data for deviation from SLDC, the state power committee will issue the statement of charges for deviation prepared for the previous week to all state entities by Tuesday.

A state deviation pool account will be maintained and operated by SLDC.

The surplus fund in the state deviation pool account will be utilized to improve power system operations, reliability, security, and safety of grid operations and undertake capacity building and training programs related to system operations and market operations.

Schedule of payment of charges

The regional entity concerned will have to pay the due amounts within seven days of the statement of charges for deviation by the SLDC, failing which a late payment surcharge of 0.04% will apply for each day of delay.

Any state entity that fails to pay charges for deviation within the time specified must open a letter of credit equal to 110% of their average payable weekly liability for deviations in the previous financial year.

In case of failure to pay into the state deviation pool account within seven days from the issue of the statement of deviation charges, SLDC can encash the letter of credit.

Within three months of notification of these regulations, the Commission will constitute the state power committee.

Last August, OERC invited suggestions on the proposed Forecasting, Scheduling, and Deviation Settlement of Wind and Solar Generating Stations at the State Level Regulations 2021.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.