CERC Introduces New Deviation Settlement Mechanism Regulations

The Central Electricity Regulatory Commission (CERC) has issued a new set of regulations, titled the Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2024.

These regulations aim to enforce stricter adherence to electricity drawal and injection schedules by grid users, ensuring the stability and security of India's power grid through a commercial mechanism.

The new regulations apply to all grid-connected regional entities and other parties involved in inter-state electricity transactions. Under these rules, entities must strictly follow their schedules as outlined in the Grid Code, with deviations being managed primarily through Ancillary Services. The notification details the computation, charges, and procedures associated with handling such deviations.

Key provisions include specific charges for deviation, categorised by the type of seller. These categories cover general sellers, including those operating run-of-river (RoR) generating stations and those using municipal solid waste, as well as wind and solar (WS) sellers. Buyers are also subject to charges for deviations under the new rules.

To maintain transparency and prompt action, the Regional Load Despatch Centres (RLDCs) are required to submit data on deviations from the previous week to the Secretariat of the respective Regional Power Committees by every Thursday. The Secretariat must then issue a statement of charges for deviations to all regional entities by the following Tuesday.

Payment of these charges is given high priority, with a 10-day deadline from the date of issue. Any delays will incur a late payment surcharge of 0.04 percent per day. Furthermore, entities that failed to meet payment deadlines in the previous financial year must open a Letter of Credit (LC) worth 110 percent of their average weekly liability for deviations from that year, payable to the relevant RLDC.

These regulations are designed with an aim to enhance grid discipline, ensuring a reliable and secure electricity supply across the nation. The CERC will announce the effective date of these regulations separately.