CERC unveils new regulations for sharing inter-state power transmission cost

The Central Electricity Regulatory Commission (CERC) today notified fresh regulations under which the point of connection would be used as the method of sharing cost of inter-state transmission charges and losses.

These regulations, finalised after consultaions that extended to a year and a half, will replace the present system of regional postage stamps, (ie, all states in the region will share the transmission charges and transmission losses on a regional pooled basis, in the ratio of the quantum of power drawn through the Inter-state transmission system) an official release said.

The new mechanism will benefit the transmission network development and the users of the transmission system, the release said.

Under the new proposed mechanism, all the users will be default signatories to the Transmission Service Agreement (TSA), which also requires these users to pay the point of connection charge, which covers the revenue of transmission licensees. This commercial arrangement would also facilitate financial closure of transmission investments, the release said.

At present the transmission investments are faced with the uncertainty in generation. Also, the process of getting the bulk power transmission agreements (BPTAs) signed by all the expected beneficiaries of the transmission system remains cumbersome.

The new regulation is also expected to facilitate integration of electricity markets and enhance open access and competition by obviating the need for pancaking of transmission charges.