The Central Electricity Regulatory Commission (CERC) has floated draft norms for sharing of Inter-State Transmission charges and losses to bridge the gaps in commissioning of transmission projects.

The regulator has sought comments and suggestions from stakeholders and interested persons by April 17 for the draft Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations.

The proposed amendments try to address the delay in commissioning of projects that have achieved commercial operation date (CoD), Nangia Andersen Partner (Power Advisory) Arindam Ghosh said.

The previous version of amendment was unable to provide a clarity on recovery of Yearly Transmission Charges (YTC) in case there is an extension of CoD of a generation project due to force majeure or any other reason attributable to the project. There were debates on whether full YTC should be levied and recovered from connectivity grantee even if there was approval given for extension of CoD of project, he explained.

Proposed norms

The regulator has proposed new penalties for certain projects where the transmission infrastructure is commissioned, but it has not been supplied with power.

“Inter-State transmission licensee shall be paid 20 per cent of the annual transmission charge (YTC) of its inter-State transmission system for a period of six months from the date of deemed CoD or till commencement of actual power flow, whichever is earlier. ,” CERC has proposed.

Besides, the licensee will be paid 100 per cent of YTC of its inter-State transmission system from the seventh month till the commencement of actual power flow, it added.

There are penalties for the inter-state transmission licensee if it is responsible for the delay (for any reason including force majeure events) in commencement of power flow in the ISTS of another inter-State transmission licensee which has achieved a valid CoD.

The licensee of the delayed inter-State transmission system shall pay 20 per cent of YTC of its transmission system or 20 per cent of YTC of the transmission system which has achieved a valid COD, whichever is lower, till its delayed inter-State transmission system achieves COD, CERC has proposed.

Mixed response expected from industry

Ghosh expects the proposed amendments to have mixed reactions from the market, while the proposed change would be welcomed by DICs (Designated ISTS Customers) like any open access customers or the Discoms.

On one hand, it would reduce the total bill incident on DICs via the first bill and eliminate the need for them to wait for a month to receive reimbursement for transmission deviation. On the other hand, it could potentially hit the cash flow of generators,” he added.

From the perspective of the generator who has been granted CoD by the Ministry of New & renewable Energy, under force majeure conditions, but still have to bear part of the transmission charges without any regular cash flow from the project yet, the proposed change may be seen as differential treatment for projects, Ghosh pointed out.

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