HPERC Proposes Amendments To DSM Regulations 2024 To Align With National Standards In Himachal Pradesh

Introduction

To coincide with the revised national standards set by the Central Electricity Regulatory Commission (CERC), the Himachal Pradesh Electricity Regulatory Commission (HPERC) has suggested changes to its Deviation Settlement Mechanism (DSM) Regulations, 2024. Published on April 26, 2025, the draft amendment attempts to harmonize state-level rules with the CERC (Deviation Settlement Mechanism and Related Matters) Regulations, 2024, which replaced the 2022 framework. These developments seek to improve grid stability, guarantee homogeneity in power deviation management, and encourage conformity with changing national electricity market standards. Stakeholders have been asked to provide comments thirty days before official launch.

Explanation (Key Points)

1. Alignment with National Standards

The changes mostly aim to match HPERC’s rules with the CERC’s 2024 DSM structure. This guarantees consistency in handling deviations (over/under-injection or drawal of electricity) across state and national grids, so enabling better inter-state power transactions and grid reliability.

2. Revised Definitions for Clarity

• Contract Rate (Clause k): Expanded to cover diverse scenarios, including renewable energy sellers, power exchange transactions, and captive consumption. Rates are now defined based on tariffs approved by regulators, power exchange prices, or weighted averages for multiple contracts.
• Reference Charge Rate (Clause x): Clarifies billing rates for general sellers, distinguishing between tariff-approved entities, power exchange participants, and non-renewable captive plants.

3. Frequency-Linked Deviation Charges

Charges for deviations are now intricately tied to grid frequency (*f*), categorized into three bands:

Within Frequency Band (49.90 Hz ≤ *f* ≤ 50.05 Hz):

• General Sellers (Non-RoR): Frequency influences the charges. For each 0.01 Hz increase above 50.03 Hz, for instance, over-injection penalties drop by 30% of RR (Reference Rate). As frequency falls below 49.97 Hz, under-injection penalties sharply increase—up to 184% of RR.
• RoR (Run-of-River) Generating Stations: Charges are frequency-agnostic. Over-injection is capped at 80% of RR, while under-injection penalties escalate (105%–120% of RR) based on deviation magnitude.

Outside Frequency Band (*f* <49.90 Hz or *f* >50.05 Hz): Penalties spike further, reaching up to 220% of RR for severe under-injection during low-frequency scenarios.

4. Buyer-Specific Volume Limits

Buyers face tiered charges based on deviation volume limits (VLB):

• VLB 1 (≤10% DBUY or 100 MW): Charges adjust with frequency; e.g., under-drawal earns 90% of NR (Normal Rate) at 50 Hz, decreasing to 45% as frequency rises.
• VLB 2 (10%–15% DBUY or 100–200 MW): Penalties escalate (e.g., 160% of NR for over-drawal below 50 Hz).
• VLB 3 (>15% DBUY or 200 MW): Severe penalties apply, including 200% of NR for over-drawal during low-frequency events.

5. Public Consultation Process

Until thirty days following publication in the Rajpatra, the draft rules are open for comments from stakeholders. Emphasizing participatory policymaking, objections or recommendations must be sent to the office of HPERC in Shimla.

Conclusion

The suggested changes by HPERC to the DSM Regulations, 2024 brings Himachal Pradesh’s electrical governance into line with national norms. The amendments seek to stabilize power systems, discourage erratic supply practices, and encourage openness by improving deviation charges, clarifying contractual terms, and tying penalties to grid frequency. Including CERC’s 2024 framework guarantees even more interoperability in India’s power markets, so benefiting consumers, distributors, and generators. Finalizing a balanced and enforceable regulatory regime will depend mostly on the participation of stakeholders during the consultation process, so advancing Himachal’s energy resilience and market efficiency.
 
https://hperc.org/new1/File1/ddsm2-25.pdf