The Gujarat Electricity Regulatory Commission (GERC) has issued a draft amendment proposing a significant reduction in banking charges for Green Energy Open Access (GEOA) consumers, lowering the interim rate from ₹1.50 to ₹1.00 per unit. This proposal, part of the Sixth Amendment Regulations, 2026, seeks to stabilize the financial impact on Distribution Companies (DISCOMs) while signaling a pro-growth stance toward the state’s renewable energy sector between September 1, 2026, and March 31, 2027.
The Core Proposal: Interim Pricing and Transition
The Commission has proposed a transitional banking charge of ₹1.00 per unit to be effective for the period starting September 1, 2026, through March 31, 2027. This replaces the current rate of ₹1.50 per unit, which was recently extended via the Fifth Amendment until August 31, 2026, to allow for the conclusion of the Commission’s financial impact study.
The proposed ₹1.00 rate is the result of a detailed GERC study conducted between April 2025 and January 2026, covering approximately 165 consumers. While the mathematical finding of the study estimated the cost of banking at ₹1.06 per unit, the Commission has intentionally rounded this figure down to ₹1.00. This rounding is a deliberate regulatory gesture intended to provide “ease of implementation” and support renewable energy growth despite certain data limitations identified during the study.
The New Dynamic Methodology (FY 2027–28 Onwards)
Beginning April 1, 2027, the GERC will move away from fixed interim rates in favor of a dynamic, annual determination methodology. This transition is technically enabled by the mandate requiring all Open Access (OA) customers to install Availability Based Tariff (ABT) compliant meters, which allow for precise injection and consumption tracking in 15-minute intervals.
Under this framework, banking charges will be recalculated annually based on actual operational data from the preceding year. The primary variables for the 15-minute time-block calculation include:
- Market Inputs: Indian Energy Exchange (IEX) Market Clearing Prices (MCP), calculated using a weighted average of 10.5% for the Real-Time Market (RTM) and 89.5% for the Day-Ahead Market (DAM).
- Operational Costs: Variable costs of marginal generating stations, determined by a weighted average of 85% Thermal and 15% Gas stations.
- Backing Down Cost: An assumed cost of 8% for backing down marginal thermal stations, as referenced in CEA flexibilization reports.
- Infrastructure Impact: Intra-state and inter-state transmission charges, alongside technical losses. These losses specifically include Inter-State Transmission Losses (J), Intra-State Transmission Losses (K), and Distribution Losses (P).
- Storage Systems: The financial impact of Battery Energy Storage Systems (BESS).
The Commission has formally adopted the Cumulative Banking Methodology for these calculations. This decision was made because the alternative Non-Cumulative approach is technically incapable of managing the complexities of Time of Use (ToU) restrictions across diverse billing slots.
Regulatory Safeguards and DISCOM Compliance
To ensure market stability and provide long-term regulatory certainty for developers and utilities, the GERC has introduced a “Floor and Ceiling” mechanism. Regardless of the annual mathematical outcome, the banking charge will be bound by the following limits:
- Minimum Banking Charge: ₹0.50 per unit
- Maximum Banking Charge: ₹1.50 per unit
To maintain the integrity of this dynamic system, DISCOMs are subject to strict data-reporting requirements. Utilities must submit 15-minute block data via a sworn affidavit, which remains subject to verification by the State Load Despatch Centre (SLDC). The following penalties apply for non-compliance to ensure costs are not unfairly passed to consumers:
| Condition | Penalty/Consequence |
| Failure to provide accurate or timely data | Banking charge for that utility considered ‘Nil’ |
| Continued non-compliance | Deemed revenue penalty of 1 paisa per unit per year adjusted against the Aggregate Revenue Requirement (ARR) |
Banking Mechanics and Limits
The proposed regulations function within the broader framework of the GERC GEOA Regulations, 2024. Key operational constraints include:
- Quantum Limit: Banked energy is capped at 30% of the consumer’s total monthly consumption from the distribution licensee.
- Settlement Period: Settlement occurs on a monthly/billing cycle basis; unused units cannot be carried forward to subsequent months.
- ToU Restrictions: Energy banked during off-peak periods cannot be utilized during peak periods. Conversely, peak-period banked energy may be used during either peak or off-peak periods.
Stakeholder Timeline and Consultation Process
The GERC is currently inviting suggestions and objections from the public regarding these draft regulations.
- Deadline for Comments: July 20, 2026.
- Public Hearing Date: July 21, 2026.
- Venue/Mode: Hybrid mode (Physical/Virtual) at the GERC Office.
Commission Contact Information: Gujarat Electricity Regulatory Commission 6th Floor, GIFT ONE, Road 5C, Zone 5, GIFT City, Gandhinagar – 382350, Gujarat, India.
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