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					</table>The Ministry of Power (<a href="https://powermin.gov.in/" target="_blank" rel="noopener">MOP</a>) has proposed regulating short-term and general network access (GNA) for distribution licensees (DISCOMs) who fail to clear their dues even after two and a half months.
The Ministry has proposed amendments to the Electricity (Late Payment Surcharge and Related Matters) Rules 2023, and encouraged Interested stakeholders to submit their comments by January 12, 2024.
The regulations will be referred to as the Electricity (Late Payment Surcharge and Related Matters) (Amendment) Rules, 2023. They are scheduled to become effective upon their publication in the official gazette.
The first amendment to the rules outlines the measures to be taken in cases of non-payment of dues by the distribution licensee or other users of the transmission system, even after two and a half months from the presentation of the bill by the generating company, transmission licensee, or trading licensee, or in the case of default in the payment of installments.
The short-term access or temporary general network access (T-GNA) or GNA for the sale and purchase of electricity through short-term contracts or power exchanges will be entirely regulated for the defaulting DISCOM.
The same restriction will apply to any existing short-term access, T-GNA or GNA.
The National Load Despatch Centre may, under exceptional circumstances for grid security, temporarily review the regulation of short-term access or T-GNA and GNA after recording the reasons in writing.
If, one month after this regulation of access, or if the dues remain unpaid for three and a half months, the medium-term open access or long-term access or T-GNA or GNA for the sale and purchase of electricity through contracts other than short-term contracts would be regulated by 10%.
The reduction or drawal of long-term access, medium-term open access, or T-GNA of GNA for the sale and purchase of electricity through contracts other than short-term contracts will occur progressively by 10% each month.
Only after the payment of outstanding dues will the regulation of short-term, medium-term open access, long-term access, or T-GNA or GNA under this rule end and be restored at the earliest, but not later than two days.
The National Load Despatch Centre is expected to issue a detailed procedure to implement these rules.
In case of the reduction of the drawl schedule, the liability for payment of capacity charges for its original share in the generating station and the inter-state transmission (ISTS) charges will remain with the regulated entity.
&#8220;Short-term access&#8221; in the above context is defined as access to the transmission system for up to one year. &#8220;Medium-term open access&#8221; pertains to access for periods ranging from one to three years, while &#8220;long-term open access&#8221; refers to access for periods exceeding three years.
Additionally, the term &#8220;short-term contract&#8221; means a contract for the sale or purchase of electricity for up to one year.
Power not requisitioned by a distribution licensee
The second proposed amendment will mandate the DISCOM to communicate its power requisition schedule for each day, pertaining to each generating company with which it has a purchase agreement, at least two hours before the closure of the timeframe for submitting proposals or bids in the day-ahead market for that day.
In the event of a failure to provide such intimation, the generating company can offer the un-requisitioned surplus power, inclusive of power available against the declared capacity of the unit under shutdown, in the power exchanges while adhering to the specified limitations on ramping and start-up capabilities as outlined in the grid code.
Provided that in cases where the power offered by the generating company remains uncleared in the Day-Ahead Market (DAM), it will subsequently be offered in other market segments, including the Real-Time Market (RTM), within the power exchanges.
Additionally, such power offerings in the market will be subjected to a price ceiling not exceeding 120% of its energy charge, as determined or adopted by the appropriate commission.
Suppose the generating company fails to present such un-requisitioned surplus power in the power exchanges. In that case, the un-requisitioned surplus power, up to the declared capacity and not offered in the power exchanges, will not be considered available for computing the payment of fixed charges.
In June last year, MoP <a href="https://www.mercomindia.com/discoms-allowed-clear-dues-generators-48-installments" target="_blank" rel="noopener">notified</a> the ‘Late Payment Surcharge and Related Matters Rules, 2022.’ According to the rules, a late payment surcharge will be payable on the outstanding amount after the due date at the base rate of the late payment surcharge applicable for the first month of default.
DISCOMs owed power generators ₹799.77 billion (~$9.6 billion) in total dues for the monthly billing cycle in October 2023. The current outstanding dues, excluding the latest monthly dues, are ₹232.62 billion (~$2.8 billion). The overdue before the trigger date is ₹232.46 billion (~$3.3 billion), after which the amount will increase by ₹160.1 million (~$1.9 million) as the late payment surcharge would become applicable.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Ministry to Regulate Transmission Access for DISCOMs Failing to Clear Dues

The Gujarat Urja Vikas Nigam Limited (<a href="https://www.guvnl.com/" target="_blank" rel="noopener">GUVNL</a>), in a recent notification, announced that the average of solar tariffs discovered and contracted through competitive bidding process conducted by GUVNL for non-park based captive solar projects during the period from October 01, 2020, to March 31, 2021, was ₹1.99 (~$0.027)/kWh.
Accordingly, as per the provisions of the Gujarat Solar policy, 2021, distribution companies (DISCOM) will pay this tariff of ₹1.99 (~$0.027)/kWh to compensate for surplus solar energy injected into the grid. This will apply to projects commissioned or to be commissioned during the period from April 01, 2021, to September 30, 2021.
According to the provisions of the Gujarat Solar Policy, 2021, the surplus solar energy generated from projects for captive use or third-party sale is to be compensated by DISCOMs at the rate linked to, “The average of tariffs discovered and contracted through competitive bidding process conducted by GUVNL for non-park based solar projects in the preceding six-month period, i.e., either April to September or October to March as the case may be, from the commercial operation date of the project. The same shall remain fixed for the entire term of the agreement.”
The Gujarat government <a href="https://mercomindia.com/gujarats-solar-policy-incentivizes-rooftop-solar/" target="_blank" rel="noopener">announced</a> the new ‘Gujarat Solar Power Policy 2021′ with incentives for residential, commercial, and industrial rooftop solar developers in December last year. The policy will be valid until December 31, 2025. As per the Solar Policy, in case of captive projects or third-party sale under the renewable energy certificate (REC) mechanism, the surplus energy after being set off on a 15-minute time block basis will be compensated by the DISCOM at 65% of the tariff discovered by GUVNL.
In an earlier petition, GUVNL had <a href="https://mercomindia.com/gerc-net-metering-rules-surplus-energy-purchase-open-access-solar-projects/" target="_blank" rel="noopener">proposed</a> that the surplus energy available from the open access solar projects set up for captive use or third-party sale be procured by the distribution licensee at the lowest tariff discovered either through competitive bidding or average power purchase cost (APPC). It was also proposed that the rate of purchase be decided on six months basis in which the plant is commissioned. For this request, the Commission had replied that the proposed rate for the purchase of surplus power is not fixed in nature, and it is difficult to decide given the conditions of the competitive bidding. In competitive bidding, there will always be two rates required to be determined by the Commission, and then, the lowest of them will have to be applied for surplus energy purchased by the licensees. The Commission also noted that the determination of tariff through competitive bidding was a process that cannot be compared to the determination of APPC.
The Gujarat Electricity Regulatory Commission has<a href="https://mercomindia.com/gujarat-commission-solar-power-procurement/" target="_blank" rel="noopener"> issued</a> the tariff framework for solar power procurement by distribution licensees in the state. The Commission had said that the new control period of the tariff framework would be effective up to March 31, 2023.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates </a>to ensure you don’t miss any critical updates from the renewable industry.

Surplus Energy by Captive Solar Projects to be Compensated at ₹1.99/kWh in Gujarat

The Gujarat Electricity Regulatory Commission (<a href="https://www.gercin.org/" target="_blank" rel="noopener noreferrer">GERC</a>) has partly approved a petition filed by Gujarat Urja Vikas Nigam Limited (<a href="https://www.gseb.com/guvnl/index.aspx" target="_blank" rel="noopener noreferrer">GUVNL)</a> to establish tariffs to procure surplus power by the distribution licensees from wind projects set up for captive use or third-party sale availing open access in the state.
Background
GUVNL, along with its four subsidiary distribution companies, had filed a petition asking for the modification in the orders relating to the purchase of surplus energy by distribution licensees from wind projects set up for captive use or third-party sale utilizing open access. Torrent Power Limited, another distribution licensee in the state, has also joined GUVNL in this petition. Further, the petition also asked the commission to decide the rate for the purchase of such surplus power from wind power projects.
In a previous order issued in 2015 by the Commission,  it had decided that in case of wind power projects availing open access for captive use or third-party sale but not opting for renewable energy certificates (RECs), the distribution licensee would purchase the surplus power at the rate of the Average Pooled Power Purchase Cost (APPC) of the year of the commissioning of the project. In case of such projects opting for RECs, the distribution licensee would purchase the surplus power on a 15-minute time block basis at 85% of the APPC of the year of commissioning of the project, throughout the life of the project.
After the recent competitive bidding in Gujarat, it is clear that the wind tariffs have <a href="https://mercomindia.com/wind-breaches-guvnls-auction/" target="_blank" rel="noopener noreferrer">fallen</a> to as low as ₹2.43 (~$0.034)/kWh, while the APPC is at ₹3.47 (~$0.049)/kWh.
Now the distribution licensees want the Commission to note that it is not justified to pay a lower tariff of ₹2.43 (~$0.034)/kWh for wind projects exclusively set up for sale of power to distribution licensees while paying more (₹3.47 (~$0.049)/kWh) to the projects set up primarily for captive use or third-party sale and selling only surplus (irregular) power to distribution licensees.
Taking this into account, the distribution licensees have requested the Commission to modify the policy, allowing the distribution licensees to purchase the surplus power at the rate of APPC or the tariff discovered through competitive bidding anywhere in India during the previous six months, whichever is lower for projects not opting for RECs. In case of such projects opting for RECs, the distribution licensee would purchase the surplus power at 85% of the APPC or 85% of the tariff discovered through competitive bidding anywhere in India during the previous six months, whichever is lower.
The Commission in reply has that this request of the distribution is not permissible.
The reasons given by the Commission for rejecting this request is that, if the Commission accepts the request of the distribution licensees, it has to determine the tariff to be given to the wind power generators either through APPC (which is monetary compensation for surplus energy injected after self-consumption or through tariff discovered under competitive bidding.
Since the rate of purchase of surplus power is not fixed in nature, it is challenging to decide the tariff with the prevailing conditions of the competitive bidding in India as there will always be two rates required to be determined by the Commission and the lowest of the two rates will have to be applied for surplus energy purchased by the licensees.
The Commission also added that the tariff for the wind projects applicable in Gujarat and the capacity utilization factor (CUF) in other states would vary, and therefore, they are not comparable.
The Commission stated that the wind power projects set up for captive use or third-party sale set up under open access, cannot be compared with the wind or other generating projects set up exclusively for the sale of electricity to the DISCOMs.
Understanding the concerns raised in the petition regarding this issue, the Commission assured that it would take appropriate decision and revise the relevant regulations and orders to decide about the monetary compensation for the projects. It also directed its staff to initiate the process of revising the relevant orders and regulations.
Mercom also <a href="https://mercomindia.com/gerc-net-metering-rules-surplus-energy-purchase-open-access-solar-projects/" target="_blank" rel="noopener noreferrer">reported</a> a similar petition for a solar project. In that case, too, the commission acknowledged the ambiguity in the regulations and stated that the matter would be further examined.
In the same month, the state <a href="https://mercomindia.com/gujarat-commission-sets-average-pooled-purchase-cost/" target="_blank" rel="noopener noreferrer">came up with</a> the average pooled purchase cost for various licensees. The commission came up with the new costs for the distribution companies that have been purchasing electricity at different prices from various sources. The commission also stated that the APPC of distribution licensees should not exceed the APPC of the state.
Image credit: By Chris Lim from East Coast, Singapore &#8211; Windmills in China, CC BY-SA <a href="https://commons.wikimedia.org/w/index.php?curid=2909338" target="_blank" rel="noopener noreferrer">2.0</a>

GERC to Revise Tariff for Surplus Energy Purchased from Captive Wind Projects

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