The Odisha Electricity Regulatory Commission (OERC) has proposed a structured framework for levying grid support charges on captive generating projects operating in parallel with the state grid.

The Commission has invited stakeholders to submit their views and suggestions by February 23, 2026, after which the draft ‘Grid Support Charges for Captive Generating Projects Regulations, 2026,’ may be modified and finalized for publication in the Official Gazette.

Grid Support Services

The draft regulations have been issued to address grid support services provided to conventional CGPs that operate in tandem or parallel with Odisha’s intrastate transmission and distribution system.

According to the Commission, such grid support services include fault-level support, voltage and frequency support, reactive power support, harmonics absorption, no-load loss support, and overall grid availability, all of which are required for the safe and reliable operation of CGPs.

The regulations are proposed under powers derived from multiple provisions of the Electricity Act, 2003, including Sections 9(2), 39, 40, 42, 61, 62, 86, and 181(2).

The Commission has stated that the objective is to ensure compensation to the transmission licensee for costs incurred in providing these grid support services, while also establishing a transparent, uniform, and technically sound charging mechanism applicable across the state.

The draft applies to all co-located conventional CGPs connected to and operating in parallel with the grid, regardless of whether they continue to meet the captive status requirements under the Electricity Rules, 2005.

GSC Calculation

The Commission has proposed that GSCs be determined using a base-MVA support method that reflects the minimum dependable grid support capacity available to a CGP at the point of common coupling.

The GSC per month to be levied on each CGP will be calculated using the following empirical formula:

• GSC𝑖𝑖 = (Base MVA𝑖𝑖) × (GSCMVA)

Where:

• GSC𝑖𝑖= Grid support charge payable by the ith CGP (₹/month)
• Base MVA𝑖𝑖= Base MVA of the ith CGP
• GSCMVA= Rate of grid support charge/MVA per month (₹/MVA/month)

The base MVA is defined as the installed capacity of the CGP minus its contract demand and scheduled export under open access, with safeguards to prevent the value from falling below zero.

Under the draft, the average GSC rate/MVA per month will be calculated based on the approved annual revenue requirement of the Odisha Power Transmission Corporation (OPTCL), total installed generation capacity in the state, system fault contribution, and total fault level at the point of interconnection.

The resulting rate is proposed to be uniformly applicable to all eligible CGPs for the entire control period, defined as April 1, 2027, to March 31, 2029.

The distribution licensee would retain 2% of the GSC amount collected as collection and administrative charges, and the balance amount would be remitted to the transmission licensee.

The Commission has also outlined the billing and recovery mechanism, placing responsibility on distribution licensees to bill CGPs monthly and remit the collected amount—after retaining a specified administrative charge—to the transmission licensee.

The draft further provides the Commission with powers to remove difficulties, relax provisions, amend regulations, and issue final interpretations.

Rising power demand from commercial and industrial users is driving steady growth in rooftop solar and open access installations in Odisha, supported by clearer policies and significant cost savings. However, developers warn that rapidly changing regulations and increasing grid tariffs mean businesses need to move quickly, as delays could raise project costs and erode the financial benefits of switching to solar.

In August last year, OERC issued the draft Intrastate Deviation Settlement Mechanism and Related Matters Regulations, 2025, to establish a commercial mechanism to ensure grid users’ adherence to scheduled electricity drawal and injection, and maintain grid security and stability.

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