CERC proposes compensation charges for GNA timeline extensions

The Central Electricity Regulatory Commission (CERC) has issued a draft procedure to levy compensation charges on connectivity grantees seeking additional time to meet key project milestones under the General Network Access (GNA) Regulations, 2022.

The proposal, introduced through Petition No. 5/SM/2026, aims to standardise the treatment of extension requests for submission of land documents, achieving financial closure (FC), and achieving commercial operation date (CoD). CERC has exercised its powers under Regulations 41 and 42 of the GNA Regulations to relax provisions and address implementation challenges.

The draft outlines a graded structure for Milestone Extension Charges (MEC), differentiated by milestone and duration. For land document submission, extensions of up to three months are allowed, with charges starting at Rs 1,500 per MW per day for the first month, increasing by 10% and 20% in the subsequent months. For FC, extensions of up to six months are proposed, with charges beginning at Rs 1,500 per MW per day for the first three months and rising progressively to Rs 1,650, Rs 1,800, and Rs 1,950 per MW per day for months four, five, and six. For CoD, extensions of up to 12 months are permitted, with a base rate of Rs 3,000 per MW per day for the first six months, increasing by 10% monthly up to Rs 3,900 for months seven to nine, and doubling to Rs 6,000 per MW per day for months ten to twelve.

Eligibility for extensions is linked to demonstrable project progress. For land-related extensions, at least 20% of required land documents need to be submitted. For FC extensions, the requirement is 50% land documentation under the land bank guarantee (BG) route or 25% under the Letter of Award (LoA) or Power Purchase Agreement (PPA) route. For CoD extensions, applicants need to submit 100% land documents under the land or land BG route, or 50% under the LoA/PPA route, along with proof of FC and details of engineering, procurement and construction (EPC) contract award.

CERC has also proposed a specific provision for delays linked to the GNA effective date. A two-month grace period has been suggested after the GNA effective date, during which no MEC will be levied for achieving CoD, considering that trial runs and pre-commissioning activities depend on substation energisation. The overall extension period remains capped at 12 months.

Under the proposed framework, MEC payments need to be made 15 days in advance. Failure to pay or to meet revised timelines would lead to revocation of connectivity, encashment of applicable bank guarantees, and treatment of Conn-BGs in line with GNA Regulations. Any unutilised advance amount within the 15-day payment window may be refunded without interest.

The collected compensation will be credited to the Deviation and Ancillary Services Pool Account.

CERC has invited comments, objections, and suggestions on the draft procedure by April 30, 2026. Submissions can be made via email or in physical form. A public hearing will be scheduled separately.

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