CERC prescribes norms for sharing of inter-state transmission charges

In a move to facilitate cost effective transmission of power across various regions of the country, the Central Electricity Regulatory Commission (CERC) has unveiled new regulatory framework for sharing of power evacuation charges and losses by all the users of inter-state transmission systems (ISTS). These norms, dubbed CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010, would implement point of connection method of sharing the cost of inter-state transmission services, replacing the present system of regional postage stamps. Apart from describing the methodology of computing the point of connection charges, these regulations also provide necessary mechanisms for billing, connection and other commercial matters.Under the new mechanism, all the power users will be default signatories to the transmission service agreement (TSA), requiring these users to pay the point of connection charge, which covers the revenue of transmission licensees. This commercial arrangement is expected to help financial closure of various transmission investments, as the transmission licensees will no longer be faced with the uncertainty in power generation projects and the cumbersome process of getting the bulk power transmission agreements (BPTA) signed by all the expected beneficiaries of the transmission system. Further, according to the apex regulator, these regulations would facilitate solar based generation by allowing zero transmission access charge for use of ISTS and allocating no transmission loss to solar based generation.

These regulations, notified on June 15, 2010, will come into force from January 1, 2011, and likely to remain in force for a period of five years.