CERC Puts Cap of Rs 12 per kWh on Normal Rate of Charges for Grid Deviations

The Central Electricity Regulatory Commission (CERC) has indicated irregularities with reference to adherence of DSM Regulations (Deviation Settlement Mechanism), 2022. The regulatory body has pointed that grid connected entities are showing a tendency to overschedule in order to avoid payment of deviation charge for overwithdrawal or under-injection. Consequently, the system frequency has remained high for a significant period of time with the generators showing a tendency for over-injection and DISCOMs underdrawing.

The DSM Regulations, 2022 aims to ensure that all grid connected entities follow schedules. It also stipulates that in case of any aberrations, that should only be inadvertent, are to be managed by the system operator through deployment of ancillary services.

Further, the CERC has advised that the generators as well as the DISCOMS need to step up regular plant maintenance while also providing mandatory primary response (for generators) along with engaging in scientific demand forecasting for DISCOMs. That apart, it has also recommended that the system operator carry out estimations for the need for and procure adequate reserves while deploying them prudently with a view to avoid frequency fluctuations. In times of high frequency, the Secondary Reserve Ancillary Services (SRAS) down and RRAS down (till TRAS comes into force) must be  deployed for frequency improvement. With the system frequency remaining high for long periods, the applicable DSM rate have also peaked.

The CERC has sounded a note of caution about the wide frequency fluctuations typically over the last couple of weeks. Grid-India, which is the system operator, has also shared that it finds it challenging to maintain system frequency in the absence of adequate support from grid connected entities. To address this, the Commission will be stepping in keeping in mind the interest of grid security to induce grid participants to stabilise grid frequency.

With this view, the CERC has invoked its powers under Regulation 12 of the DSM Regulations, 2022 to address the challenge as highlighted by Grid-India. The said Regulation states that the regulatory body is authorised to issue practice directions when a difficulty arises with respect to executing regulations, ” If any difficulty arises in giving effect to these regulations, the Commission may on its own motion or on an application filed by any affected party, issue such practice directions as may be considered necessary in furtherance of the objective of these regulations.”

To stabilise the high DSM rates, the Commission will now be putting a cap on the normal rate of charges for deviation. Accordingly, the Commission has imparted the decision that the normal rate of charges for
Deviations for a time block as specified as per DSM Regulations, 2022, shall be subject to the cap of Rs 12 per kWh, until further orders.

The CERC has pronounced that in cases, where the system frequency is at 49.90 Hz or below in a time-block, “The general seller other than an ROR generating station or a generating station based on municipal solid waste shall be paid back from the Deviation and Ancillary Service Pool Account @ 150% of reference charge rate for deviation by way over injection in such time block.”