CER Newsletter

Vol 04 Issue 03 (Jan 22)

Vol 04 Issue 02 (Oct 21)

Vol 04 Issue 01 (July 21)

Vol 03 Issue 04 (Apr 21)

Vol 03 Issue 03 (Jan 21)

Vol 03 Issue 02 (Oct 20)

Vol 03 Issue 01 (Jul 20)

Vol 02 Issue 04 (Apr 20)

Vol 02 Issue 03 (Jan 20)

Vol 02 Issue 02 (Oct 19)

Vol 02 Issue 01 (Jul 19)

Vol 01 Issue 04 (Apr 19)

Vol 01 Issue 03 (Jan 19)

Vol 01 Issue 02 (Oct 18)

Vol 01 Issue 01 (Jul 18)
Regulatory Blog

Draft GERC (Electricity Supply Code and Related Matters) (Third Amendment) Regulations, 2022

Draft APERC Renewable Power Purchase Obligation (Compliance by purchase of Renewable Energy/Renewable Energy Certificates) Regulations, 2022
❖ Roof-top Solar PV System, if such consumer is an obligated entity.
❖ Distribution Licensees can purchase renewable energy from other Distribution Licensees.
Section 86(1)(e) mandates the SERCs to specify a percentage of total consumption in the area of the licensee to be sourced from renewable energy sources. Redefinition of ‘total consumption’ to exclude consumption from RES suggests a departure from the provision of the Act and should be restored.

Draft GERC (Security Deposit) (Third Amendment) Regulations, 2022
Highlights -
GERC on 19th February, 2022 notified the Draft GERC (Security Deposit) (3rd Amd) Regulations, 2022. The key highlights of the draft are mentioned below:
Clause No. 4.11:
The licensee shall pay interest on Security Deposit of consumer other than Security Deposit received from Temporary Consumer for the electricity supplied, at the Bank Rate (as on 1st April of every year) notified by Reserve Bank of India or such higher rate as may be fixed by the Commission from time to time. The interest accrued to the credit of the consumer during the previous year shall be adjusted in electricity bills of May of every year for consumers covered under the monthly billing cycle and in electricity bill of May or June for those covered under bi-monthly billing cycles.
Clause No. 4.14:
The Licensee, on termination of the agreement by either party shall refund Security Deposit after adjustment of dues, if any within 7 days.
CER Opinion -
1. Security Deposit based on Average Billed Amount: Wherever there is a reference to Security deposit, the Regulations only refer the average consumption of number of units. Given the two-part/ multi-part tariff structure, the security deposit should cover energy as well as fixed charges

Draft GERC (Consumer Grievances Redressal Forum and Ombudsman) (First Amendment) Regulations, 2022
ii. If the Licensee fails to resolve a Complaint in accordance with the Standards of Performance specified by the Commission

Draft GERC (Licensee’s Power to Recover Expenditure incurred in providing Supply and other Miscellaneous Charges) (Third Amendment) Regulations, 2022
Highlights -
GERC on 19th February, 2022 notified the Draft GERC (Licensees' Power to Recover Expenditure incurred in providing Supply and other Miscellaneous Charges) (3rd Amd) Regulations, 2022. The key highlights of the draft are mentioned below:

Draft Guidelines for UERC (Deviation Settlement Mechanism and Related Matters) (First Amendment) Regulations, 2022
UERC notified a draft on “Deviation Settlement Mechanism and Related Matters (First Amendment) Regulations, 2022” on March, 2022. The key highlights of this draft Regulation are given below:
New Definition have been added:
1. Area Clearing Price (ACP) means the price of a time block electricity contract established on the Power Exchanges after considering all valid purchase and sale bids in particular area(s) after-market splitting, i.e., dividing the market across constrained transmission corridor(s).
2. Daily Base DSM Charge means the sum of charges for deviations for all time blocks in a day payable or receivable as the case may be, excluding the additional charges under Regulation 8.”
3. Day Ahead Market (DAM) means a market where physical delivery of electricity occur on the next day (T+1) of the date of transaction (T) and is governed by the Central Electricity Regulatory Commission (Power Market) Regulation, 2010 (as amended from time to time), the Rules and Bye-Laws of the Power Exchanges as approved by the Central Commission.”
CER Opinion -
The broader alignment of the UERC DSM regulations to those applicable at the inter-state level (i.e. by CERC) is necessary to ensure that there is overall harmony in treatment of deviations. However, two important points that would justify departure of intra-state DSM regulations to those applicable for the inter-state level. These are:
1. Applicability of DSM regulations in line with the impact of variable RE to the state’s power system applicability of DSM regulations in line with the impact of variable RE to the state’s power system.
2. The adoption of ‘local price’ signal rather than a national average area clearing price (ACP).

CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2021
(c) Renewable Power Park Developer;

CERC: Draft Guidelines for Registration and Filing Application for Establishing and Operating Over the Counter (OTC) Platform

Ministry of Power Amendments to Guidelines for short-term Procurement of Power (i.e. for a period of more than one day to one year) by Distribution Licensees through Tariff based bidding process [Draft]
Highlights -
MoP has issued the Amendments to Guidelines for short-term Procurement of Power (i.e. for a period of more than one day to one year) by Distribution Licensees through Tariff based bidding process on 22nd December, 2021. The key highlights of the draft are as below:-
The following sub-clauses have been added in the existing Guidelines under Clause No. 6.4 (iv) g;
❖ In case the Seller fails to offer the contracted power as per the Agreement to the Procurer and sells this power without Procurer’s consent to any other party, the Procurer shall be entitled to claim damages from the seller for an amount equal to the higher of:-
a. Twice as per the PPA
b. The entire sale revenue accrued from Third Parties on account of sale of the contracted power.
There will not be any fixed charges liability to the procurers, for the power which was not supplied.
❖ On a complaint to this effect by the Procurer to the concerned load dispatch center, the Seller shall be debarred from participating in power exchanges and scheduling of this power in any short/ medium/ long-term contracts from that generating station for a period of 3 months from the establishment of default, in the complaint. The period of debarment shall increase to 6 months for send default and shall be 1 year for each successive default.
CER Opinion -
1. Name of the document: These Guidelines named as “Draft Amendments to Guidelines for short-term Procurement of Power (i.e. for a period of more than one day to one year) by Distribution Licensees through Tariff based bidding process”, may be renamed as “…for a period of more than one day, and up to one year…” in order to match the name of the term of agreement.
2. Clause No. 6.4 (iv) (a): The guidelines now also include a penal structure for ‘deviation’ from contracted capacity that has been granted open access (beyond 15%). It should be clarified if the Contract Performance Guarantee (CPG) would be applicable over and above the penalty for ‘deviation’ provided for in clause 6.4 (iv) (e) with respect to the seller.
3. Contract Performance Guarantee (CPG): The Contract Performance Guarantee (CPG) of Rs. 2 lac per MW per month is an insignificantly amount as compared to the value the seller can derive from non-performance. For e.g. In case the unit price of electricity is assumed to be Rs. 4.00 per kWh, the total amount at stake for, say 1 MW of supply during peak hours (say a 4-hour duration) for 20 working days would be itself be Rs. 80,000.00. The CPB seems insignificant and hence highlights the need for the penalty structure to address incentive to divert power when market prices are high for certain duration during the contract.

TNERC (Grid connectivity and Intra-State Open Access) (Amendment) Regulations, 2014 [Draft]
2. Regulation No 19 (2):
Definition of “predominant” needs to be included in these Regulations,
or may be referred to in case a definition already exists.
3. Regulation No 19 (2): To
bring about clarity differentiating the applicability of the
Regulations for the captive consumers and others, the following phrase
is suggested to be inserted in the draft amendment, “These apportionment
Regulations are differentiated across entities, seeking open access,
based on them being a captive entity or not”.
4. Regulation No 19 (2) (A): The
category mentioned under Non-captive Thermal as, “Short-term
inter-state open access including power exchange transactions”, is
suggested to be separated to “collective transactions through power
exchange” and “short-term inter-state open access”. This will set a
clear priority between the two types of transactions.

HPERC (Consumer Grievances Redressal Forum and Ombudsman) (Second Amendment) Regulations, 2021
Highlights -
HPERC notified draft amendment to the (Consumer Grievances Redressal Forum and Ombudsman) Regulations, 2021 on 24th Nov, 2021. The key highlights of the same are mentioned below:
1. Prosumer (Regulation 3 ((1) (ia))): Definition of ‘Prosumer’ to be added in the prevailing Regulation.
2. Additional Forum (Regulation 5 (2), (3)): Provision for establishment of at least one additional forum for each of distribution licensee’ operation circles, by the distribution licensee is to be added. The jurisdiction thereof in relation to the consumers under the respective operation circles, will be as follows:
a) For the consumers covered under single-part retail tariff - all types of complaints, whether monetary or non-monetary.
b) For the consumers covered under two-part retail tariff - all types of complaints whether monetary or non-monetary, where the following conditions are met:
❖ the amount of dispute / claim ≤ ₹ 2 Lakh
❖ the standard supply voltage ≤ 22kV
CER Opinion -
1.Definition of Prosumer [Draft Regulation 3 (1) (ia)]: The draft Regulation provides the definition of ‘Prosumer’. However, the term ‘Prosumer’ is not used further in this Regulation. So, it is suggested to append the proposed definition of Prosumer by including a statement just after its definition such that wherever there is a reference to consumer in this Regulation, it should also deem to include prosumers.
The reference to ‘Prosumer’ may increasingly appear in a variety of other Regulations and orders (for example in the case of tariffs, open access, SOPs etc.). Hence, it is suggested that this definition for Prosumer should be a part of the State’s Grid Code. The prosumer may also refer to mobile storage such as electric vehicles (EVs) especially when EVs inject power in vehicle to grid mode (V2G).

APERC (Terms and Conditions for short-term procurement/sale of power) Regulation, 2021
APERC issued draft on 23rd Nov, 2021 regarding (Terms and Conditions for short-term procurement/sale of power) Regulation, 2021. The key attributes of this Regulation are given below:
Demand Estimation:
SLDC to carry out monthly demand estimation for each block of 15 minutes duration, based on (historical data, demand forecasts by the licensees and AI tools - deep/machine learning etc). In addition to these, weekly & day-ahead demand estimations should also be considered by SLDC.
This Regulation has separate provisions for monthly, weekly and day-ahead power procurement plan as mentioned below:
1. Monthly Power Procurement Plan:
❖ Each licensee to provide its demand estimation for each block of 15 minutes duration to SLDC by the end of 10th of every month.
❖ After reviewing its own demand estimation for the State, estimate provided by all the licensees, availability of power from all the approved sources, SLDC to communicate with the licensees regarding the power required to be procured by each licensee on a short-term basis for the following month within three working days from the date of receipt of demand estimations from the licensees.
CER Opinion -
1. Short-term Demand Estimation and Procurement Plan (Regulation 3, 4, 5, 6): The draft Regulation provide provisions for the demand estimation and power procurement plan for short-term at three levels i.e. monthly, weekly and daily. It is suggested that the demand estimation as well as the power procurement plan proposed in this Regulation should be carried out at four levels instead of three levels namely:
❖ Monthly demand estimation and power procurement plan
❖ Weekly demand estimation and power procurement plan
❖ Day ahead estimation and power procurement plan
❖ Demand estimation and power procurement plan for Real-time market (RTM), at least 8 to 10 blocks ahead before the RTM (to make final preparation for buy and sell in the RTM)

OERC (Procurement of Energy from Renewable Sources and its Compliance) Regulations, 2021 [Draft]
Regulation (No. 4.7): In case of Hybrid Sources, the power procured from the hybrid project may be used for fulfillment of solar RPO and non-solar RPO in the proportion of rated capacity of solar and wind power in the hybrid plant respectively.
Further, renewable power stored in any form of storage (Battery, Mechanical or Gravitational) and subsequently discharged to the grid from such storage shall be treated as renewable energy.
CER Opinion -
1. Accounting of Renewable Energy from Storages (Clause 4.7): Clarification on accounting of renewable energy from storages as stated in Clause 4.7 “Further, renewable power stored in any form of storage (Battery, Mechanical or Gravitational) and subsequently discharged to the grid from such storage shall be treated as renewable energy” may be required.
It is suggested that in case of storages connected to solar sources, the discharge of energy from such storages should be accounted as solar energy and energy procured from such storages may be used for fulfillment of solar RPO.
Similarly in case of storages connected to non-solar sources, the discharge of energy from such storages should be accounted as non-solar energy and energy procured from such storages may be used for fulfillment of non-solar RPO.
For storages connected to hybrid sources, the discharge of energy from such storages should be accounted towards solar and non-solar energy in the proportion of generation of solar and wind power respectively in the previous month from the hybrid plant, and energy procured from such storages may be used for fulfillment of solar RPO and non-solar RPO in the same proportion.

CEA Draft (Deletion and modifications of Formats for furnishing of the Statistics, Returns or Information, its time schedule and periodicity), 2021
CEA by utilizing the power granted under sub-regulation (2) of regulation 9 of the said regulations, decides for the deletion of thirteen formats among them (namely Format no.30, Format no.39, Format no.40, Format no.45, Format no.46, Format no.47, Format no.50, Format no.52, Format no.55, Format no.57, Format no.61, Format no.62 and Format no.63) and the modification of five formats (namely Format no.21, Format no.49, Format no.51, Format no.53 and Format no.54).
CER Opinion -
Need for Data - Tool for effective policy and regulatory design:
It is important to highlight that availability of information is very crucial to design effective policy and regulatory framework and also enable various stakeholders including researchers to evaluate the impact of various measures and suggest improvement thereof. It is suggested to retain most of the formats proposed to be deleted. Given change in the sector, additional formats are identified for inclusion as well.
Absence of data would create significant information asymmetry. While the cost of providing such data is not significant to the sector participants, its value to the sector is extremely high. CEA should reconsider the proposal to drop various data formats and take necessary steps to make data being collected through various formats to be made available through its website.

Draft Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters)
❖ WS Seller: Seller who provide solar and wind resource based power
The draft Regulation defines General Seller as “a seller in case of a power project based on other than wind or solar resources” and WS Seller as “a seller in case of a power project based on wind or solar energy”. It is suggested to modify the above definitions of General Seller and WS Seller. The General Seller may be renamed as ‘Despatchable seller’ in case of a power project based on the conventional power like thermal power and a ‘constrained Despatchable seller’ like Run-of-River (RoR) generating stations. The WS Seller may be renamed as ‘Non-Despatchable seller’ in case of a power project based on wind or solar energy.
❖ Definition of RE Rich State: A RE rich state is defined as a state with 1000 MW or above installed capacity of variable renewable energy (VRE) (i.e. Solar and Wind) within the control area of the state. The variability and uncertainty associated with the schedule of a state depends on the ‘contracts that it handles for consumption within the state. The RE rich state should thus be defined with reference to the contracted capacity of VRE by all entities connected to the ‘control area of the state’ (i.e. including long-term open access for VRE by consumers).

Ministry of Power Electricity (Rights of Consumers) Amendment Rules, 2021
2.
Classification of Metros and Large Cities: In Rule (10(3)), “In view of
the increasing pollution level particularly in the metros and the large
cities …”, An existing definition for urban conglomerations (metro/city
etc) as applicable may be used for the purpose for implementation of
the provision regarding shift from DG backup.

RERC (Renewable Energy Obligation) (Seventh Amendment) Regulations, 2021 [Draft]

Draft Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2021
Ministry
of Power issued the Draft Electricity (Promoting Renewable Energy
through Green Energy Open Access) Rules, 2021 on 16th August, 2021. Some
of the key points are:
❖ Applicability - This rule will be pertinent to green energy purchase and consumption including energy generated via Waste-to-Energy plant.
❖ Renewable Purchase Obligation (RPO) -
There will be uniform RPO for all obligated entities (i.e. the
distribution licensees, open access and captive power consumers).
Non-obligated entity may also select to purchase and consume Renewable
Energy as per their requirements.
❖ Purchase of Green Hydrogen -
The obligated entity including the Industries can also purchase Green
hydrogen (hydrogen produced using electricity from RE sources).
❖ Green Energy Open Access - To
provide green energy open access to consumers who wants to use it, the
Appropriate Commission shall prepare regulations in line with this Rule.
The consumers, except captive consumers, having contracted
demand/sanctioned load of 100 kW and above shall be eligible to take
power through green energy open access.
CER Opinion -
1. Renewable Purchase Obligation (RPO) (Rule 4): As
per the draft Rule (4.1), “There shall be uniform Renewable Purchase
Obligation, on all obligated entities that is – the distribution
licensees, open access consumers and captive power consumers”. However,
it needs to be clarified whether the uniformity of RPO on obligated
entities is across the country or across these three set of obligated
entities within a state.
2. Defining ‘Behind the meter’ Generation Sources (Rule 4):
Rule (4.2 (A)) provides the definition of ‘Behind the meter’ as “the
electricity generated for their own use and not for injection of such
power into the electricity grid”. Although, in the case of captive
(group) and specifically plant not located on the premises of the
consumer, such power generated for their own use would have to be
‘injected’ into the electricity grid for wheeling the same to the
premises of the consumers. Hence, the above definition need to be
modified appropriately.

Chhattisgarh State Electricity Regulatory Commission (Terms and Conditions for determination of tariff according to Multi-Year Tariff principles and Methodology and Procedure for determination of Expected revenue from Tariff and Charges) Regulations, 2021 [Draft]
Highlights -
Chhattisgarh State Electricity Regulatory Commission released draft CSERC (Terms and Conditions for determination of tariff according to Multi-Year Tariff principles and Methodology and Procedure for determination of Expected revenue from Tariff and Charges) Regulations, 2021 based on the objections/suggestions/comments received on the Draft MYT Regulations, 2020. The important highlights of this draft regulation are given below:
Financial Principles:
❖ Return on Equity (Regulation 23):
o 14% for Generation, Transmission & SLDC.
o 16% for Distribution
o Grossed up by MAT rate
o Rate of pre-tax RoE = Base Rate / (1- MAT Rate)
❖ Depreciation (Regulation 25):
o Value Base = Capital Cost of the asset
o Straight Line Method
o Depreciation on new assets will be charged on day-wise pro-rata basis during the first year of the COD of the asset.
CER Opinion-
We are pleased to note that several inputs given on the previous draft of the regulations have been incorporated in this revised draft. Some important ones are highlighted here along with additional ones for consideration.
❖ Return on Equity (Regulation 23.3):
As Capital Asset Pricing Model (CAPM), often used for calculating return on equity, provides an estimate of post-tax RoE that should not be grossed up by the rate of effective tax. Adoption of such approach across the sector is erroneous, and provides excess return. This places additional burden on tariff paid by the consumers.
A recent study at CER, IITK using CAPM and multi-factor models, using a comprehensive data for over 125 infrastructure companies between 1998-2018, estimates the cost of equity for conventional generation sector to range between 12.86-16.52%, on a post-tax basis, refer Figure 1: Cost of Equity – CAPM and Three-Factor Model.

Review of the Benchmark Capital Cost for Solar PV, Solar Thermal and Grid Interactive Rooftop & Small Solar PV Plants to be applicable for FY 2021-22 and onwards till reviewed/revised by the UERC
Highlights -
Uttarakhand Electricity Regulatory Commission (UERC) reviewed the "Benchmark Capital Cost for Solar PV, Solar Thermal and Grid Interactive Rooftop & Small Solar PV Plants to be applicable for FY 2021-22 and onwards till reviewed/revised by the UERC" on 30th July, 2021.
Some of the key points are given below:
❖ The normative capital cost for Solar PV, Solar Thermal and Grid Interactive Rooftop & Small Solar PV Plants is inclusive of all capital works including plant and machinery, civil works, erection and commissioning, financing and interest during construction etc., and evacuation infrastructure upto the interconnection point.
❖ The proposed generic tariffs for Solar PV, Solar Thermal and Grid connected Rooftop & Small Solar PV Plants shall be applicable on the projects commissioned on or after 01.04.2021 and shall continue to be applicable till further reviewed by the Commission. Also, the tariffs determined shall be the ceiling tariffs and procurement of power shall be done through competitive bidding route by distribution licensee.
CER Opinion -
❖ High Capital Cost for Improved Operational Parameters: The draft document identified upgradation of technology as one of the reasons for the revised capital cost. If so, the same should be reflected in efficient operational parameters to be considered for determination of tariff as well. The commission should thus consider uprating the efficiency and other parameters (example: CUF, degradation factor etc.) for different Solar PV applications.
❖ Competitive Bid-based Project’s Tariff: Levelised tariff for competitively bid projects show significant decline in the electricity procurement from Solar PV technology. A similar decline is generally not reflected in the benchmark capital cost. A comparative assessment of decline in bid based tariff and that of the benchmark capital cost should enable vetting of the benchmarked capital cost and other cost components.

Tamil Nadu Electricity Supply Code on stipulating harmonic limits, Methodology of measurements, meter standards, penalties etc., to ensure quality of supply to consumers [Draft Amendment]
Highlights -
• "the limits of injection of current harmonics at the point of common coupling by the user, method of harmonic measurement and other such matters, shall be in accordance with the IEEE Std. 519-2014, as amended, from time to time”.
❖ Current distortion/ harmonics are measured at point of common coupling (PCC) in:-
• Bulk consumers at 33KV and above
CER Opinion -
2. Computation of TDD (Regulation 1 (f)): It may be clarified in the draft regulation that which of the following value(s) should be considered while computing the TDD values at 99th Percentile or 95th percentile at the interval of 3 s/ 10 min:-
• Average Value
• Highest Value
• Value at the beginning/end of the observed time period

Discussion Paper on Market Based Economic Dispatch (MBED)

Draft CERC (Ancillary Services) Regulations, 2021

Discussion paper on redesigning the Renewable Energy Certificate (REC) Mechanism
Key objectives:
❖ To increase the share of non-fossil fuel based electricity energy to meet the international target of 175 GW by 2022.
❖
The floor and forbearance prices are not required to be specified as
RECs holders would have the complete freedom to decide the timings to
sell
❖ CERC may intervene in cases of malpractices observed in the REC trading
❖
The concept of multiplier, negative list and sunset clause can be
introduced for various technologies depending upon their maturity level
With
the RECs having a perpetual validity, the relevance of floor price is
further diminished. Furthermore, compliance penalty for RPO shortfall
(as applicable in respective states, if any) indirectly translates into a
forbearance price (See Singh (2010) for further discussion on the
same).
2. REC as Unified framework for “Guarantee of Origin”:
The REC framework should be expanded as a unified framework for
“Guarantee of Origin”. Non-REC projects do not have a guarantee of
origin certification at present. This currently serves the purpose as
the system operator and the distribution utility can identify the energy
injected through the metering infrastructure. However, there is such
certification to allow this ‘green energy’ to be identified and traded
further in the market. By issuing RECs to all RE projects (including
those under FiT framework, captive as well as merchant RE capacity) in
the country would have following advantages
❖ Ensure full visibility of RE energy footprint across the country.
❖ Unified ‘Guarantee of Origin’ certification across all RE technologies
❖ Enable the obligated entities (Discoms+) to offload, in the form of RECs, excess RE procurement beyond their RPO, particularly that on account of contracts signed under the FiT framework.
❖ Develop a retail market for ‘green electricity’, wherein distribution utilities can sell a ‘green electricity product’ to willing consumers.

HPERC (Security Deposit) (Fourth Amendment) Regulations, 2021

Proposed Amendments in JERC for the State of Goa & UTs (Electricity Supply Code) Regulations, 2018

Proposed OERC (Procurement of Energy from Renewable Sources and its Compliance) Regulations, 2021

National Electricity Policy, 2021 (Draft)

Electricity (Rights of Consumers) (Amendment) Rules, 2021.
Highlights:
The Ministry of Power prepared and notified on 9th April, 2021 a draft amendment to the Electricity (Rights of Consumers) Rules, 2021. These rules may be called the Electricity (Rights of Consumers) (Amendment) Rules, 2021.
Key points of the amendment rules are:
- Definitions of “Gross-metering”, “Net-metering” and “Net-billing or net feed-in” may be added in sub-rule to the Rule 2 of the Electricity (Rights of Consumers) Rules, 2020.
- The Commission may allow net metering to the prosumer for loads up to 500 kW or up to the sanctioned load, whichever is lower and net-billing or net feed-in for other loads.
- Prosumers are incentivized to install energy storage so that stored solar energy can be utilized by them or fed into the grid during peak hours
CER Opinion:
- In the definition of “Gross-metering” the phrase ‘appropriate metering arrangements’ needs to be clarified. Gross metering requires more than one metering arrangement and the above phrase conflicts with the definition of prosumer ‘using same point of supply’.
- Rule (3) of the Amendment rules may be reconstructed as “….. for loads up to 500 kW or up to the sanctioned load or contract demand (as the case may be), whichever is lower…..”
- Commissions should be replaced with ‘Appropriate Commission’.

Implementation of Budget Initiatives for the Power and Renewable Energy Sector

Electricity (Change in Law, Must-run status, and other Matters) Rules, 2020

Draft Joint Electricity Regulatory Commission for the state of Goa and Union Territories (Generation, Transmission and Distribution Multi-year tariff) Regulations, 2021
Highlights -
JERC (Goa & UTs) issued a draft Generation, Transmission and Distribution Multi-year Tariff Regulation, 2021, and will be applicable to the state of Goa and Union Territories. The key highlights of the regulation are given below:
1. Capital Cost:Any gain or loss resulting from a shift in foreign exchange rates for the loan amount up to the date of commercial operation would be offset only against the foreign debt portion of the capital cost.If actual capital cost is less than approved capital cost then actual capital cost shall be considered.
CER Opinion -
Foreign Debt Component (Regulation 24.1): The first proviso of the Regulation 24.1 (e) may be reworded as ‘Provided that any gain or loss on account of foreign exchange rate variation pertaining to the loan amount availed up to the Date of Commercial Operation shall be adjusted only against the foreign debt component of the capital cost’.

Determination of levellised generic tariff for FY 2021-22 under Regulation 8 of the CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2020 [Proposal]
Highlights -
CERC has notified a proposal for determination of levellised generic tariff for FY 2021-22 on 18th February, 2021.
These regulations specify the tariff determination for the RE projects (small hydro projects, biomass power projects with Rankine cycle technology, non-fossil fuel-based co-generation projects, biomass gasifier-based power projects and biogas-based power projects) which shall be applicable during the period from 1st April, 2021 till 31st March, 2022.
CER Opinion -
Swiss Challenge for all Cases Involving Project-Specific Tariff: As per current scenario the energy market is mature enough. The solar as well as wind technologies have witnessed a significant competition. The relative success of competitive technologies further encourages the competitiveness in the sector, CERC should leave it to the market forces.

Tripura Electricity Regulatory Commission (Consumer Prepaid Metering) Regulations, 2021
❖ The Regulation will cover new single-phase and three-phase LY Industrial, NDS, mobile towers and temporary connections up to a connected load of 50KW.
(62) "specified" means specified by regulations made by the Appropriate Commission or the Authority, as the case may be, under this Act.

Telangana State Electricity Regulatory Commission (Deviation Settlement Mechanism and related matters) Regulation, 2020
TSERC notified draft for Deviation Settlement Mechanism (DSM) on 28th December, 2020. This Regulation will come into picture from 1st March, 2021.
Applicability - It includes Buyers & Sellers engaged in conveyance related transactions of electricity via open access utilising intra-state transmission system (In-STS) and/or distribution system of electricity (including inter-state wheeling of power).
CER Opinion -
❖ Need for an objective definition of ‘gaming’ (Regulation 2.1(p)): The objective definition of ‘gaming’ should clearly identify the basis for assessing ‘intentional mis-declaration’ of the schedule. As an alternative, tightening of the deviation limit during the peak hours (when DSM prices are expected to be higher) can also reduce the incentive for gaming through over injection by the generators/under-drawl by the buyers.

RERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2020

CERC Terms and Conditions for Tariff determination from Renewable Energy Sources (RES) Regulation, 2020

Electricity Act, 2003 Amendment 2020 [Draft]

MNRE: Draft Guidelines for Implementation od Off-Grid Solar Power Plants in RESCO model under MNRE Programme

WBERC’s Draft for Amendment to Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulations
Highlights -
The WBERC notified draft for the amendment to Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulations, 2013. Highlights are below:
1. Consumer can install rooftop system of 1 kW or above capacity (up to total sanctioned load or contract demand) can claim net-metering/net-billing benefits.
2. DISCOMs are proposed to procure 100% of energy from waste to energy plants in their respective areas.
3. Unmet solar RPO obligation above the 85% of total RPO can be met by non-solar energy, and vice-versa.
CER Opinion -
1. RPO trajectory for the state should be specified in advance so as to provide opportunity to obligated entities to make appropriate investments or plan to procure RE/REC.
2. In case the tariff for RE has been discovered under section 63 of EA, 2003 and has been adopted by the commission, the same should not be subjected to the price cap under regulation 6.0.
3. An RPO compliance framework, supported with penalty in proportion to the shortfall, would help ensure that obligated entities take adequate steps to meet their RPO target including through purchase of RECs.

CSERC Standard of Performance (SoP) in Distribution of Electricity Regulation, 2020

MERC’s Draft for State Grid Code Regulations, 2020
Highlights -
MERC released draft State Grid Code Regulations (MEGC, 2020) on 1st Mar 2020. MEGC, 2020 is applicable to all generators in the state connected to intra-state transmission system (InSTS), transmission licensee in the state including STU, Maharashtra SLDC, distribution licensees including deemed distribution licensees, Indian Railways, OA consumers and EHV consumers connected to InSTS. Major highlights of the proposed regulations are below:
1. STU is to explore and evaluate alternate options if capital expenditure for any new transmission system exceeds threshold limit of ₹100 crore or as declared by the Commission from time to time.
2. SLDC need to maintain the spinning reserve margin equivalent to 3% of the system peak demand and 3% of installed capacity for the generators to manage ramp up.
3. The generating company can de-rate the capacity or can go for repeat trial run. The demonstrated capacity, in case of derating, will be equal to or greater than 105% of de-rated capacity for thermal InSGS and 110% for hydro generating station.
CER Opinion:
1. The investment approval framework should include a cost-benefit analysis considering economic efficacy of the investment and the system security over medium to long-term. Excess investment towards reliable of power supply needs to be controlled to avoid burden on consumers.
2. Clause 30.6 requires 'instantaneous' picking up of the generation to 105/110% in case of ‘sudden fall in system frequency’, which should be specified.
3. Framework for procurement and payment for spinning reserve capacity margin and its recovery from system participation (specially load serving entities) should be specified.

CERC's Proposal for Determination of Forbearance Price and Floor Price for the REC Framework
Central Electricity Regulatory Commission (CERC), via notification dated 31st Mar 2020, proposed to adopt forbearance price and floor price of Renewable Energy Certificates (REC) as given in the table:
Details |
Solar REC (₹/MWh) |
Non-Solar REC (₹/MWh) |
Forbearance Price |
1,000 |
1,000 |
Floor Price |
0 |
0 |
CER Opinion:
1. As the proposed REC floor price for solar/non-solar RECs is zero, reference to floor price as a part of REC framework under the principle REC Regulations can be deleted.
2. Given that SERCs are allowing excess solar (non-solar) RPO quantum to be adjusted against non-solar (solar) RPO, fungibility between solar and non-solar RECs is clearly visible and should be institutionalized.

HERC: Guidelines for certifying or refusing to certify non-availability to Transmission/Distribution system or Unscheduled Load Shedding
Highlights -
HERC drafted guidelines for certifying or refusing to certify non-availability to transmission or distribution system for OA consumers. Major highlights of the proposed regulations are below:
1. Surplus capacity to be offered to LTOA, MTOA, and STOA in respective order. In case of system enhancement, the applicant will pay the Distribution Capacity cost for grant of LTOA.
2. Consumers capacities of 10 MW and above will be eligible for connectivity at 33 kV or above, rest at below 33 kV.
3. In case of unnotified outage on account of transmission/distribution system, the licensee will compensate the OA consumer the charges payable by consumer to the generating company or the lowest tariff applicable to the consumer category, whichever will be lower.
CER Opinion:
1. To discourage withholding and to bring competitiveness in allocation of unused transmission/distribution capacity, the unused transmission capacity should automatically be released to the SLDC.
2. In case of refusal of OA application, SLDC should provide alternate slots/lower capacity or a timeline for available capacity in future.
3. In case of failure of power evacuation and compensation for wheeling and transmission charges, a mechanism to pass on the benefit to the buyer should be introduced.

CEA proposes amendment to Furnishing of Statistics, Returns and Information Regulations, 2007
Highlights -
The Central Electricity Authority (CEA) has proposed amendment to Furnishing of Statistics, Returns and Information Regulations, 2007. The CEA proposes to add four new formats (Format 21A, Format 21B, Format 66 and Format 67) for furnishing of the information in the Regulations.
CER Opinion:
1. Scope for format 21A and 21B should be defined in such a manner that the two tables are mutually exclusive. As per given definition, there would be common CPPs whose data would be reported in both tables.
2. In the format 21A, unit of Electricity Demand should be MVA instead of MW as industrial contract demand is considered in MVA
3. ‘Variable charges’ may be used in place of ‘fuel charges’ in column 16 of the format 66.

POSOCO's "Draft Procedure for Collective Transactions through Real Time Market (RTM)"
POSOCO released draft procedure for scheduling collective transactions in RTM. The draft addresses issues related to processing of application, treatment of losses, congestion management, and revision of schedule, etc. Major highlights are below:
1. Proposal for allocation of transmission corridor to exchanges based on ratio of their shares in the cleared volume in DAM, subject to minimum 10% for exchange having smaller share.
2. It is proposed that the exchange should submit scheduling request to the NLDC 3 time blocks ahead for delivery of the power.
3. Proposal for the SLDCs to schedule transactions for state utilities/intra-state entities, given the exchange should send detailed breakup of each point of injection and drawl to respective SLDCs two time blocks ahead of delivery time.
4. In case of transmission constraints or threat to grid security, short term transaction to be curtailed first, followed by medium and long-term.
CER Opinion:
1. POSOCO should evaluate the impact of the allocation scheme and identify the pattern of underutilization of allocated transmission capacity and seek suggestions to address the same.
2. More clarification is required for cases where a beneficiary/generator can trade in RTM for the ‘same’ capacity, a single standing clearance, if required, would suffice.
3. If
the respective ERC order for intrastate transmission charges or the SLDC system
operating charges is not available, the procedure specifies such charges to be
applicable. Legal aspects of such a ‘determination’ should be reviewed to avoid
any issues later.

GERC's "Tariff Framework for Procurement of Power by Distribution Licensees and Others from Solar Energy Projects and Other Commercial Issues for the State of Gujarat"
Summary -
The GERC notified discussion
paper for tariff framework concerning procurement of solar power by DISCOMs and
other stakeholders. The discussion paper proposes competitive bidding for all
solar projects, including small projects of 5 MW or less capacity. A brief
summary is below:
1. For projects below 5 MW
capacity, proposal to determine tariff through competitive bidding in different
time period of 6 months of the year.
2. Proposes a maximum allowed capacity at 50% of
contracted load for captive use, third party sale, and projects under national
solar mission.
3. Wheeling and cross subsidy
charges between 50% to 100% as applicable to normal OA consumers, are proposed for different
category of projects.
CER
Opinion
1. Linking tariff determination
of small project (below 5 MW) with larger projects is a positive step, but the
commission should also consider the significant diseconomies of scale for
smaller projects while finalizing tariff.
2. We suggest that the basis for
linking of tariff for small project can be pegged at a rate bit higher than the
prevailing mark-up.
3. A large number of small scale
projects can be bundled together to form a competitive market for smaller PV
projects and offering them for bidding. This can address issues related to
economies of scale.

TNERC's "Consultative Paper for Procurement of Solar and Wind Power by Distribution Licensee and Related Issues"

APERC's "2nd Draft Amendment to Open Access Regulation"
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