CERC approves procedure for reallocation of vacant ISTS bay capacity
The Central Electricity Regulatory Commission (CERC) has approved a detailed procedure for reallocating terminal bay capacity at Inter-State Transmission System (ISTS) substations that becomes vacant due to withdrawal, relinquishment or revocation of connectivity, or due to rearrangement under the Connectivity and General Network Access (GNA) Regulations.
The procedure, prepared by the Central Transmission Utility (CTU) following stakeholder consultation, operationalises Regulation 11C introduced through the third amendment to the CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022. The framework came into effect on June 9, 2026, the date of issuance of the order.
Priority-based allocation
Under the approved framework, vacant capacity at an ISTS substation or pooling station will be reallocated to eligible entities within the same cluster based on the time and date stamp of their connectivity applications.
Reallocation may be triggered by closure, revocation or relinquishment of connectivity, rearrangement under Regulation 11.4, or any other event resulting in the creation of spare capacity at a substation.
Reallocation process
CTU will undertake the reallocation exercise after processing applications for change of source submitted during the Right of First Refusal (ROFR) period and applications received under ROFR provisions.
The Commission stated that reallocation exercises must be completed before fresh connectivity is granted to new applicants.
Vacant capacity remaining after a reallocation exercise will be considered for fresh connectivity grants through the normal process.
Solar and non-solar access
The procedure requires CTU to maintain the original nature of connectivity while reallocating capacity, whether for solar hours, non-solar hours or both.
For vacancies arising before the transition exercise under the third amendment regulations, reallocation will be made for solar hours equal to the connectivity quantum that was revoked or relinquished. Non-solar hour capacity will be allocated based on margins available after processing transition applications.
Publication of vacancies
CTU has been directed to publish vacancy details on its website within three working days of the occurrence of the event creating the margin. The disclosure will include the available capacity, date of occurrence and nature of connectivity.
Vacant margins below 50 MW will be published for information purposes only and will not trigger a formal reallocation exercise. However, such capacity may be allocated to existing connectivity grantees at the same substation seeking enhancement of capacity.
Eligibility conditions
Only entities holding in-principle or final connectivity grants at an ISTS substation within the same cluster will be eligible to apply for reallocation.
Applications must be submitted within 15 days of the vacancy declaration. Submission of the prescribed application form will be treated as prior consent for reallocation and will remain irrevocable unless withdrawn during reallocation meetings.
Entities will not be eligible for reallocation after 12 months from the issuance of the final connectivity grant or 18 months prior to the firm start date, whichever is later.
The procedure also bars entities that have already availed reallocation once from participating in subsequent reallocation exercises. Reallocation that results in postponement of the firm start date is not permitted.
Commercial obligations
Where a vacated bay is allocated to another entity with a later firm start date, the outgoing connectivity grantee will remain liable for applicable transmission charges from the date the vacancy arises until the firm start date of the new grantee.
The charges will be recoverable through bank guarantees.
Entities receiving reallocated connectivity must submit revised connectivity bank guarantees within one month of receiving the revised connectivity grant. Failure to do so will result in cancellation of the reallocation, and the entity will become ineligible for future reallocations.
Monthly treatment of vacant capacity
The procedure provides that all vacant margins available at a particular substation as of the last date of each month will be considered together for reallocation.
The Commission also took note of the comprehensive procedure submitted by CTU and stated that it may issue further directions for modification if required.
Regulatory filing details
The order was issued on June 9, 2026, by a bench comprising Shri Jishnu Barua (Chairperson), Shri Ramesh Babu V. (Member), Shri Harish Dudani (Member) and Shri Ravinder Singh Dhillon (Member).
The order relates to the approval of the “Procedure in respect of Regulation 11C” under the CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022, as amended.
Regulation 11C deals with the reallocation of part or full capacity of terminal bays that become vacant. The framework applies to entities holding connectivity grants at ISTS substations and seeking reallocation within the same cluster, with CTU designated as the nodal agency for implementation.
The featured photograph is for representation only.
