The Central Electricity Regulatory Commission (CERC) has quashed bilateral transmission invoices totaling approximately ₹2.2 crore raised against JSW Renew Energy Ltd. The dispute involved the Central Transmission Utility of India Limited (CTUIL) and Karur Transmission Ltd (KTL) regarding charges for a transmission system in Tamil Nadu. The Commission ruled that while renewable energy developers remain liable for charges when generation is delayed, such billing must be strictly proportionate to the operationalized connectivity capacity rather than the cost of the entire transmission system.
THE DISPUTE BACKGROUND: PROJECT SPECS AND BILLING CONFLICT
The conflict centered on JSW Renew Energy’s wind-solar hybrid project, a 310 MW ISTS-connected facility located in Tamil Nadu. CTUIL, acting on behalf of the transmission licensee KTL, issued invoices for bilateral transmission charges following delays in the project’s commissioning, asserting that the associated transmission infrastructure was ready for power evacuation.
Financial Claims and Billing Inconsistencies The specific financial claims contested by JSW totaled approximately ₹2.2 crore (₹21.97 million). These were comprised of two primary invoices:
- ₹36.67 lakh for October 2023
- ₹1.83 crore for November 2023
The “Mismatch” Argument and Operationalized Capacity JSW argued that CTUIL had erroneously loaded the transmission charges of KTL’s entire 1,000 MW transmission system onto the developer. This billing occurred despite JSW having only 100 MW of operationalized connectivity capacity at the time. The developer contended that it was inequitable to bear the total cost of a 1,000 MW system when only a fraction of the project’s staggered operationalization was integrated into the grid.
JSW’s Regulatory Defense In its defense, JSW relied on directions issued by the Ministry of Power under Section 107 of the Electricity Act, 2003. The developer argued that these guidelines, along with subsequent orders extending project commissioning deadlines, should protect renewable energy developers from bearing transmission charges during granted extension periods or before the full operationalization of General Network Access (GNA).
TECHNICAL CHRONOLOGY AND DEEMED COD
To resolve the dispute over the commencement of liability, the Commission conducted a technical review of the commissioning of the KTL transmission assets:
- November 29, 2023: Technical records indicated that the associated transformers and transmission lines were fully integrated and operational, establishing the actual integration date.
- December 7, 2023: The Commission officially fixed this date as the deemed COD (Date of Commercial Operation) for the KTL transmission system.
THE CERC RULING & DIRECTIVES
The CERC issued a 60-page order outlining the following directives to address the mismatch between generation and transmission timelines:
Quashing of Invoices The Commission set aside the invoices raised in December 2023 and January 2024. The ruling determined that these invoices were incorrectly issued because they covered a billing period prior to the officially recognized deemed COD of December 7, 2023.
Rejection of Total Waiver The CERC rejected JSW’s request for a complete waiver of transmission charges. Citing Regulation 13(3) of the Sharing Regulations 2020, the Commission clarified that renewable energy developers are liable for charges when the transmission system is ready but the generating station is delayed. The Commission held that transmission arrangements operate independently of power purchase agreements.
Proportionate Billing Mechanism While enforcing liability, the Commission applied the “Principle of Proportionality” to ensure equitable cost-sharing. It ordered a two-pronged recovery approach:
- JSW Liability: Charges are to be recalculated and billed to JSW based only on the 100 MW of delayed operationalized capacity.
- Remaining Balance: The transmission charges for the remaining 900 MW capacity of the 1,000 MW system are to be socialized and recovered through the national transmission pool mechanism, ensuring the transmission licensee is not denied its tariff while preventing “stranding” costs for the developer.
Implementation Timeline The CERC directed CTUIL to verify the commercial operation dates and issue revised, proportionate invoices within one month of the order.
REGULATORY CONTEXT (SHARING REGULATIONS 2020 & 2023)
The decision was reached within the framework of the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2020, and its subsequent amendments. These regulations aim to ensure a transparent and fair mechanism for allocating the costs of the interstate transmission network among all stakeholders.
The ruling reinforces a critical regulatory precedent: financial liability is tied to actual operationalized connectivity capacity rather than the total capacity of an oversized transmission system. By balancing Regulation 13(3) with the Principle of Proportionality, the Commission protected the developer from inequitable financial burdens while ensuring the transmission licensee’s costs are recovered through the national pool.
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