Introduction

The Central Electricity Regulatory Commission (CERC) issued a significant regulatory order on February 21, 2021, concerning the sharing of inter-state transmission charges and losses. This order, in the case of National Load Dispatch Centre, In Re, establishes new precedents for the computation and approval of transmission charges and loss sharing mechanisms under the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010 (hereinafter referred to as the 2010 Sharing Regulations). The National Load Dispatch Centre (NLDC), acting as the Implementing Agency, played a pivotal role in this process by submitting detailed computations and schedules for approval.

Summary of the Judgment

The CERC, after thorough examination, approved the transmission charges and loss-sharing computations submitted by the NLDC for the period from October 2020 to November 2020. The order outlines the pertinent data, including zonal and nodal transmission charges, transmission losses, and the schedule of charges payable by each Distribution Licensee (DIC). It also delineates the Points of Connection (PoC) slab rates across various regions and entities, ensuring transparency and compliance with the 2010 Sharing Regulations.

Key highlights of the judgment include:

• Approval of the Basic Network Data, Load Flow Studies, and assumptions for computation of PoC rates and transmission losses.
• Detailed PoC slab rates for Long Term Access (LTA) and Medium Term Open Access (MTOA) across different regions.
• Directive for the Implementing Agency to publish zonal PoC Rates and related details to enhance transparency.
• Clarification on the transition to the CERC Sharing Regulations, 2020, effective from November 1, 2020, ensuring continuity in billing during the transition period.

Analysis

Precedents Cited

The judgment primarily references the 2010 CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, which form the foundational legal framework governing the computation and sharing of inter-state transmission charges and losses in India. These regulations empower the CERC to oversee and approve the methodologies and data submitted by the NLDC for determining transmission costs.

Additionally, the order acknowledges the transition to the CERC Sharing Regulations, 2020, highlighting the regulatory evolution and the Commission's adaptability to new legislative frameworks. While specific judicial precedents are not cited, the order aligns with regulatory precedents established under the 2010 Regulations, ensuring consistency and legal compliance.

Legal Reasoning

The CERC's legal reasoning centers on adhering to the procedural and substantive requirements stipulated in the 2010 Sharing Regulations. The Implementing Agency, NLDC, submitted comprehensive data encompassing basic network assumptions, load flow studies, transmission charges, and loss computations. The Commission meticulously reviewed these submissions to ensure they align with the regulatory provisions.

Key aspects of the legal reasoning include:

• Compliance Verification: Ensuring that the NLDC's computations and assumptions are in strict adherence to the 2010 Regulations.
• Transparency and Accountability: Mandating the publication of zonal PoC rates and underlying data to promote transparency among stakeholders.
• Transition Management: Addressing the shift from the 2010 to the 2020 Regulations by providing clear guidelines for billing during the transition period.

The Commission's approval signifies a validation of the NLDC's methodologies and promotes uniformity in transmission charge computations across different regions and entities.

Impact

The judgment has far-reaching implications for the electricity sector, particularly in inter-state transmission operations. Key impacts include:

• Standardization of Charges: Establishing standardized PoC slab rates fosters consistency in transmission charges, reducing disputes and enhancing operational efficiency.
• Enhanced Transparency: The directive to publish detailed PoC rates and underlying data empowers Distribution Licensees and other stakeholders with clear insights into charge computations.
• Regulatory Compliance: Reinforcing adherence to regulatory frameworks ensures that transmission charges are fair, justifiable, and reflective of actual costs and losses.
• Facilitation of Market Operations: Clear and approved transmission charges facilitate smoother operations in power trading, Long Term Access (LTA), and Medium Term Open Access (MTOA) arrangements.

For future cases, this judgment serves as a reference point for the approval processes related to transmission charges, influencing how similar regulatory submissions are evaluated and sanctioned.

Complex Concepts Simplified

Transmission Charges and Loss Sharing

Transmission Charges: Fees levied for the use of the electrical transmission network to carry electricity from generators to consumers.

Loss Sharing: The distribution of energy losses that occur during transmission among various stakeholders, typically based on predefined formulas or proportions.

Points of Connection (PoC) Slab Rates

PoC Slab Rates: Tiered pricing structures based on the capacity (in MW) connected by a distribution licensee. Different slabs represent different ranges of capacity, with each slab assigned a specific rate per MW per month.

Long Term Access (LTA) and Medium Term Open Access (MTOA)

LTA: Contracts that allow a buyer to access the transmission network for a long-term period, typically several years.

MTOA: Contracts that provide temporary access to the transmission network for medium-term durations, usually up to a few years.

Load Flow Studies

Analytical studies conducted to determine the electrical flow of power through the transmission network under various conditions, ensuring efficiency and reliability.

Reliability Support Charges and HVDC Charges

Reliability Support Charges: Fees allocated to maintain and enhance the reliability of the transmission network.

HVDC Charges: Fees specific to High Voltage Direct Current (HVDC) transmission systems, which are used for long-distance and high-capacity power transfers.

Conclusion

The CERC's order in the case of National Load Dispatch Centre, In Re marks a pivotal moment in the regulatory landscape governing inter-state transmission charges and loss sharing in India. By approving the NLDC's detailed computations and introducing standardized PoC slab rates, the Commission has reinforced the principles of transparency, consistency, and regulatory compliance.

This judgment not only ensures that transmission charges are calculated and shared fairly among stakeholders but also facilitates smoother transitions between regulatory frameworks. The emphasis on publishing detailed PoC rates and underlying data promotes an open and accountable electricity market, fostering trust and cooperation among generation, transmission, and distribution entities.

In the broader legal context, this order serves as a benchmark for future regulatory decisions, showcasing the CERC's commitment to meticulous oversight and progressive policy implementation. Stakeholders within the electricity sector must stay attuned to such developments to navigate the evolving regulatory environment effectively.