Gujarat Electricity Regulatory Commission Rejects SLDC’s Bid for Additional Deviation Charges

Summary:

The Gujarat Electricity Regulatory Commission (GERC) has dismissed a petition submitted by the State Load Despatch Centre (SLDC) seeking the establishment of a mechanism to recover additional charges from entities deviating from their scheduled electricity supply.[1] The SLDC contended that such deviations led to grid imbalances, necessitating interventions that resulted in increased costs. However, the GERC concluded that the petition was unnecessary and lacked merit under the prevailing legal and regulatory framework.

Case Timeline:

• 2010: The SLDC assumed the responsibility of managing scheduling and dispatch services for Gujarat’s electricity grid.
• 2014: The GERC formally adopted the Deviation Settlement Mechanism (DSM) regulations formulated by the Central Electricity Regulatory Commission (CERC). This mechanism was intended to address deviations in scheduled electricity supply and maintain grid stability.
• 2015: The SLDC filed a petition with the GERC, proposing the introduction of a new mechanism to recover additional charges from entities responsible for deviations. The SLDC argued that these deviations forced them to procure power from non-scheduled generating companies at higher tariffs, ultimately burdening consumers with increased electricity costs.
• 2024: Following a comprehensive evaluation of the SLDC’s petition and the responses from various stakeholders, the GERC delivered its verdict, rejecting the proposed mechanism.

Issue Raised:

The central issue in this case revolved around the SLDC’s authority to impose additional charges for deviations from scheduled electricity supply. The SLDC argued for the necessity of a compensatory mechanism to recover costs incurred due to these deviations.

Appellant’s Arguments (SLDC):

• The SLDC asserted that deviations from scheduled electricity supply created imbalances within the grid, necessitating costly interventions to restore stability.
• They contended that the current DSM regulations were insufficient to address the financial burden imposed on the SLDC due to these deviations.
• The SLDC argued for the creation of a compensatory mechanism that would enable them to recover costs incurred due to deviations, including the higher tariffs paid to non-scheduled generating companies.

Respondent’s Arguments (Various stakeholders, including major electricity companies):

• The respondents argued that the SLDC’s petition was not maintainable under the Electricity Act, 2003, as it did not pertain to a dispute between licensees and generating companies.
• They emphasized that the SLDC’s primary role is statutory and should adhere to the existing DSM regulations adopted from the CERC.
• The respondents highlighted that the existing DSM regulations already provided a comprehensive framework for managing deviations and associated costs.
• They further argued that the SLDC’s concerns unfairly targeted intra-state entities and did not adequately account for recent developments in the energy sector, such as the growing emphasis on renewable energy sources.

Order:

After a thorough examination of the evidence and arguments presented, the GERC rejected the SLDC’s petition. The commission determined that the existing DSM regulations adequately addressed deviations and their associated costs. Additionally, the GERC found that the SLDC’s petition did not align with the provisions of the Electricity Act, 2003, as it did not pertain to a dispute between relevant parties.

Analysis:

This case underscores the complex interplay between grid management, regulatory frameworks, and the evolving energy landscape. The GERC’s decision reaffirms the importance of adhering to established regulations and ensuring that proposed changes are well-justified and compliant with legal provisions. The ruling also reflects the need for ongoing dialogue and collaboration between stakeholders to navigate the challenges posed by the dynamic nature of the electricity sector.

[1] https://gercin.org/wp-content/uploads/2024/05/Final-Draft-Order-1480-of-2015-31052024.pdf