Author: PPD Team Date: 23/06/2025

Wide view of a large electrical substation with transformers and power lines

Renewables:

DERC revises net metering rules for ToD consumers under Sixth Amendment

The Delhi Electricity Regulatory Commission (DERC) has issued the Sixth Amendment Guidelines, 2025, modifying the Group Net Metering and Virtual Net Metering for Renewable Energy Guidelines, 2019. The amendment takes effect immediately upon publication on the DERC website.

The key change replaces the term “off peak time block for ToD consumers” with “normal time block for ToD consumers” in Sub-clauses (c) and (e) of Clause (2) of Guideline 8. Energy accounting for Time of Day (ToD) consumers will now be based on normal time blocks, aligning with the method used for Non-ToD consumers.

The amendment was issued under Sections 181, 61(h), and 86(1)(e) of the Electricity Act, 2003, and relevant provisions of the DERC Net Metering Regulations, 2014.

Read the full order here.

HERC waives fees, eases metering rules for rooftop solar scheme

The Haryana Electricity Regulatory Commission (HERC) has approved key relaxations to promote rooftop solar adoption under the PM-Surya Ghar: Muft Bijli Yojana (PMSG:MBY). In an order dated 10 June 2025, HERC waived processing fees, meter testing and installation charges, and the requirement for net metering agreements for domestic consumers opting for rooftop solar under the scheme.

The order came in response to a petition by Dakshin Haryana Bijli Vitran Nigam (DHBVN), which sought alignment with the Ministry of New and Renewable Energy’s (MNRE) guidelines to simplify the application process. MNRE had allocated Rs 145.8 million in incentives to DHBVN for FY 2023–24, subject to these waivers.

Domestic consumers under PMSG:MBY will no longer pay the Rs 1,000 processing fee or meter-related charges ranging from Rs 90 to Rs 330. Participants are also exempt from signing net or gross metering agreements.

DHBVN estimates a Rs 158.3 million revenue loss due to these waivers. However, it expects to offset this with MNRE subsidies, which have totalled Rs 572.6 million between 2019 and 2024.

Petition No. 24 of 2025 | Read the full order here.

KSERC issues draft 2025 regulations for renewable energy and prosumers

The Kerala State Electricity Regulatory Commission (KSERC) has released the draft Kerala State Electricity Regulatory Commission (Renewable Energy and Related Matters) Regulations, 2025 on 30 May 2025. The draft proposes a five-year framework from FY 2025–26 to accelerate renewable energy adoption and ensure grid stability. Comments from stakeholders are invited by 30 June 2025, followed by a public hearing.

Issued under the Electricity Act, 2003, the regulations consolidate rules on tariff determination, grid connectivity, metering, energy storage, and open access for renewable energy systems (RES), including battery energy storage systems (BESS) and pumped storage.

Chapter III introduces new billing and settlement rules, mandatory from 1 October 2025. Systems installed before this date will continue under the KSERC Net Metering Regulations, 2020 until transition.

The regulations provide for multiple metering options—Net Metering, Gross Metering, Net Billing, Virtual Net Metering (VNM), Group Net Metering (GNM), and Behind-the-Meter systems—catering to domestic, agricultural, institutional, and industrial consumers. Net metering is limited to systems between 1 kW and 3 kW, extendable to 5 kW with hybrid inverters. Gross metering is allowed up to 3 MW. Behind-the-meter systems must not export power to the grid.

The regulations promote storage integration, incentivising energy injection during peak hours and encouraging charging during solar hours. Deviation settlement will apply to prosumers above 100 kW injecting surplus, once state DSM regulations are notified. Hosting capacity per distribution transformer is capped at 90%.

Connectivity and safety norms include use of ABT and smart meters, with applications and tracking to be managed via a mandatory online portal. Tariffs will consider project-specific costs, with normative capital cost benchmarks: Rs 890 lakh/MW for small hydro below 5 MW, Rs 1,027 lakh/MW for 5–25 MW, and Rs 1,200 lakh/MW for pumped storage. O&M costs will escalate by 5.25% annually.

The draft also introduces time-of-use tariffs, banking charges, and mandates prosumer storage to manage grid stability. It includes provisions for hydro tourism and silt sales to enhance utility revenue.

Petition No. 3228/ Con.Engg/ 2023/ KSERC | Read the full order here.

UPERC revises rooftop solar injection compensation rules in final order

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved amendments to the solar injection compensation mechanism under the UPERC Rooftop Solar PV Grid Interactive System Regulations, 2019. The decision was issued in Petition No. 2149 of 2024, filed by the distribution companies of Uttar Pradesh Power Corporation Ltd. (UPPCL).

The utilities sought to revise Regulation 10.3(ii) to align compensation rates with current solar market trends. They proposed that compensation be linked to the weighted average tariff of large-scale solar projects (5 MW and above) discovered through central and state tenders, with an added 25% incentive.

UPPCL also requested inclusion of tariffs discovered by intermediary agencies and bids pending formal adoption. UPERC rejected this, stating tariffs must be officially approved to have legal standing.

Noida Power Company Ltd. (NPCL) flagged concerns over the difficulty of isolating solar tariffs due to new policy requirements for co-located Energy Storage Systems (ESS). UPPCL acknowledged the issue but said limited data on ESS-linked tariffs prevents action for now.

UPERC approved the following change to Regulation 10.3(ii): compensation for solar injection will now include tariffs discovered by intermediary agencies acting on behalf of the licensee, provided they are approved by UPERC. This broadens the earlier scope, which was limited to tariffs discovered directly by the licensee and adopted by the Commission.

Petition No. 2149 of 2024 | Read the full order here.

Transmission:

CERC clears merger of 12 POWERGRID arms into Khavda II-C Transmission

The Central Electricity Regulatory Commission (CERC), in its order dated 30 May 2025, has granted in-principle approval for the amalgamation of 12 subsidiaries of Power Grid Corporation of India Ltd (POWERGRID) into POWERGRID Khavda II-C Transmission Ltd. The move is aimed at consolidating renewable energy (RE) transmission infrastructure under a unified operational framework.

The merger is proposed under Sections 17(1) and 17(3) of the Electricity Act, 2003, and involves a Scheme of Arrangement under the Companies Act, 2013. Final implementation is subject to the Ministry of Corporate Affairs’ (MCA) approval.

The 12 Special Purpose Vehicles (SPVs), currently executing Tariff-Based Competitive Bidding (TBCB) projects across Gujarat, Rajasthan, Andhra Pradesh, Karnataka, and Chhattisgarh, will transfer their assets, liabilities, and transmission licences to Khavda II-C Transmission. Notable projects include Khavda RE Zone Phase II-B and II-C (4.5 GW each), Bhadla Sikar Transmission (8.1 GW), and Ananthpuram–Kurnool solar zones (3.5 GW).

CERC accepted the rationale of improving operational efficiency by reducing administrative burden and legal multiplicity. The merged entity is required to maintain separate accounts for each project to ensure tariff transparency.

As conditions, POWERGRID must obtain a no-objection certificate from the Central Transmission Utility of India Ltd (CTUIL) for BOOT-based projects and adhere to its equity lock-in, retaining 100% ownership. Post-approval from the MCA, transmission licences will be transferred and endorsed to the merged entity. Shareholders of the amalgamating SPVs will receive equity in the merged company based on a valuation report from a registered valuer.

Petition No. 439/MP/2024 | Read the full order here.

CERC approves merger of five POWERGRID SPVs into Vataman Transmission

The Central Electricity Regulatory Commission (CERC), in an order dated 30 May 2025, granted in-principle approval for the amalgamation of five subsidiaries of Power Grid Corporation of India Ltd (POWERGRID) into POWERGRID Vataman Transmission Ltd. The move consolidates transmission Special Purpose Vehicles (SPVs) operating under Tariff-Based Competitive Bidding (TBCB) norms, mainly in Rajasthan and Gujarat.

The merger is being undertaken under Sections 17(1) and 17(3) of the Electricity Act, 2003, and a Scheme of Arrangement under the Companies Act, 2013. Final execution is subject to approval from the Ministry of Corporate Affairs (MCA).

The SPVs being merged are involved in key renewable energy (RE) evacuation projects such as Bhadla III Transmission (20 GW capacity) in Rajasthan and Vataman Transmission (7 GW) in Gujarat. All assets, liabilities, and licences of the five entities will be transferred to POWERGRID Vataman Transmission Ltd, which will continue to maintain project-specific accounts to ensure tariff transparency.

CERC noted the merger will streamline operations, reduce compliance burden, and simplify financial management while retaining regulatory oversight. The Central Transmission Utility of India Ltd (CTUIL) issued a no-objection certificate, confirming that the Transmission Service Agreements (TSAs) and equity lock-in requirements are preserved.

The Commission directed that post-merger, all assets and liabilities be accounted for at their existing book values to avoid altering the debt-equity structure. Shareholders of the merging companies will receive equity shares in the transferee entity based on a valuation report certified by a registered valuer.

Petition No. 500/MP/2024 | Read the full order here.

Distribution:

DERC notifies revised payment norms for Discom-led government projects

The Delhi Electricity Regulatory Commission (DERC) has notified the Supply Code and Performance Standards (Seventh Amendment) Regulations, 2025. The amendment revises the payment and execution procedures for infrastructure projects carried out by distribution licensees (Discoms) on behalf of the Delhi government.  

Discoms will now receive 30% advance payment for design and procurement after submitting a proforma invoice and undertaking. The remaining 70% will be paid after execution and installation, supported by invoices, utilization certificates, and completion reports.

During project execution, Discoms are entitled to interest on working capital at the rate of SBI’s one-year Marginal Cost of Funds-based Lending Rate (MCLR) plus 350 basis points.

The amendment waives the requirement for Discoms to furnish bank guarantees for advance payments. Instead, they must submit an undertaking. Any unrecovered advance will be adjusted against Delhi Transco Ltd.’s Annual Revenue Requirement (ARR).

The regulation clarifies that project costs for activities such as HT/LT line shifting or bus depot electrification will not be passed on to consumers or included in Discoms’ ARR.

If a government department fails to pay the 70% balance within 45 days, it will be liable to pay interest at the MCLR plus 350 basis points.

Read the full order here.

GERC revises FPPAS framework to allow quarterly computation for FY 2025–26

The Gujarat Electricity Regulatory Commission (GERC) has issued a suo motu order modifying the Fuel and Power Purchase Adjustment Surcharge (FPPAS) mechanism for FY 2025–26. The Commission has replaced its monthly computation mandate with a quarterly framework to improve operational feasibility and ease for consumers.

FPPAS will now be calculated every quarter using the formula under Clause 115(m) of the GERC (Multi Year Tariff) Regulations, 2024. For instance, cost variations for April–June will be recovered during the July–September billing cycle. The current quarterly billing cycle will remain unchanged to avoid tariff shocks and administrative complexity. DISCOMs must publish FPPAS details on their websites prior to billing.

The earlier forfeiture clause has been relaxed. Unrecovered FPPAS amounts can now be carried forward and recovered in later quarters or during the annual true-up.

DISCOMs must submit FPPAS calculations within one month of the quarter’s end, with supporting documents filed twice a year. These filings will align with annual tariff true-up processes.

Gujarat Urja Vikas Nigam Ltd. (GUVNL) and Torrent Power Ltd. (TPL) supported the shift to quarterly computation, citing seasonal averaging and better system readiness. Gujarat State Electricity Corporation Ltd. (GSECL) sought quarterly fuel cost adjustments for generators, which the Commission partially accepted. Consumer group GKVGSS raised transparency concerns, leading GERC to mandate improved public disclosures by DISCOMs.

The Commission noted that the change addresses practical issues such as data validation delays and billing challenges in monthly computations.

Petition No. 2485 of 2025 | Read the full order here.

MSERC issues draft MYT Regulations, 2025 for FY28–FY30 control period

The Meghalaya State Electricity Regulatory Commission (MSERC) has issued a consultation paper for the draft MSERC (Multi Year Tariff) Regulations, 2025, inviting stakeholder comments to finalize the tariff framework for FY 2027–28 to 2029–30. The proposal aims to enhance financial discipline, regulatory predictability, and operational efficiency across the generation, transmission, and distribution sectors.

The Commission noted that Meghalaya’s utilities—MePGCL (generation), MePTCL (transmission), and MePDCL (distribution)—are still evolving in terms of regulatory compliance, citing challenges such as data inconsistency, high Aggregate Technical and Commercial (AT&C) losses, and weak reporting systems. As a result, MSERC has retained a three-year control period instead of transitioning to a five-year period adopted in other states.

Key regulatory proposals include:

Capital Investment Plans (CIP): Utilities must obtain prior approval for projects exceeding a set financial threshold. All assets must be geo-tagged. Emergency works can be undertaken with retrospective approval.

O&M Expenses: The paper proposes a normative method based on past actuals, escalated by a combination of Consumer Price Index (CPI) and Wholesale Price Index (WPI). The Commission seeks views on appropriate escalation ratios and treatment of pay revisions.

Depreciation: The draft shifts from a 12-year to a 15-year loan tenure for new assets commissioned after April 1, 2025, to help reduce initial tariff burdens.

Debt-Equity Ratio: Continues with the normative 70:30 structure; grants are excluded from the regulated capital base.

Return on Equity (RoE): A new structure links RoE to performance indicators like availability, reliability, and efficiency. The base RoE will be calculated using the Capital Asset Pricing Model (CAPM), with sector-specific variations for generation, transmission, and distribution.

Interest on Loans and Working Capital: Both to be calculated normatively using the State Bank of India (SBI) Marginal Cost of Funds Based Lending Rate (MCLR) plus a margin.

Incentives and Penalties: Utilities will receive RoE incentives for outperformance and face penalties for failing to meet benchmarks.

Renewables: A green tariff mechanism is proposed. Consumers opting in must source at least 25% of their energy from renewable sources.

Time-of-Day Tariffs: Time-differentiated pricing will apply — 20% higher during peak hours (1700–2300 hrs) and 15% lower during off-peak hours (2300–0600 hrs).

Additional proposals include improved handling of Incidental Expenditure During Construction (IEDC), norms for working capital, and mechanisms for prepaid metering and demand-side management.

Comments are invited from stakeholders to shape the final regulation, which is expected to replace the existing MSERC (Multi Year Tariff) Regulations, 2014.

Read the full order here.

Power Trading:

CERC grants Category IV trading licence to Dhara Power for 25 years

The Central Electricity Regulatory Commission (CERC) has granted a Category IV inter-State trading licence to Dhara Power for a period of 25 years. The order, dated 11th June 2025, allows the company to conduct electricity trading operations across India under Section 14 of the Electricity Act, 2003 and in line with the Trading Licence Regulations, 2020.

Dhara Power had filed the application on the basis of its financial and professional eligibility. As per its audited balance sheet dated 5th May 2025, the company met the required net worth of Rs 1 billion and maintained the minimum current and liquidity ratios of 1:1. The Commission also noted the presence of qualified full-time professionals in technical, commercial, and financial roles, fulfilling the regulatory criteria.

A public notice was issued across major newspapers in English and Hindi on 29th May 2025, inviting objections or suggestions. None were received. Dhara Power had earlier published notices on 11th March 2025 as required under the Act.

CERC’s decision follows its prima facie view on 24th May 2025, where it found Dhara Power eligible for the trading licence and proposed its grant, subject to public feedback.

The licence is subject to several conditions. Dhara Power is prohibited from engaging in transmission activities during the licence period and must comply with CERC’s Trading Licence Regulations, including the prescribed trading margin and payment of annual licence fees. The company must also start trading within one year, failing which the licence may be revoked.

Further, any non-compliance with the Act or regulations may lead to suspension or cancellation of the licence. Dhara Power is required to regularly submit compliance reports and operational details as directed by the Commission.

Petition No. 362/TD/2025 | Read the full order here.

Miscellaneous:

APSERC issues draft fees regulations for tariff, licensing, and dispute resolution

The Arunachal Pradesh State Electricity Regulatory Commission (APSERC) has released the Draft APSERC (Fees) Regulations, 2025, proposing a new fee framework for power sector entities across the state. These draft regulations aim to replace the APSERC (Fees) Regulations, 2011, and will come into force upon publication in the official Gazette.

The proposed framework covers fees for applications, licensing, tariff filings, performance reviews, true-up petitions, and dispute adjudications under the Electricity Act, 2003. It introduces structured charges based on technology type, installed capacity, and licensee category.

For generation projects, tariff petition fees are proposed at ₹6,000 per MW (subject to a ₹30 lakh minimum) for conventional plants and ₹7.5 lakh minimum for renewable energy plants. Transmission licensees would pay a minimum of ₹10 lakh, and distribution licensees ₹15 lakh, for tariff filings.

The draft regulations also specify:

  • Initial licence fee: ₹5 lakh
  • Annual licence fees: ₹6 lakh (transmission), ₹10 lakh (distribution), ₹5 lakh (trading)
  • Fees for performance reviews and true-up petitions, based on energy handled
  • Dispute resolution fees up to ₹10 lakh depending on case complexity

APSERC retains authority to impose penalties for regulatory non-compliance under Section 142 of the Act. However, such penalties will not be recoverable through tariffs. All fees must be paid via demand draft, digital transfer, or other specified banking modes, with accompanying declarations in Form I.

The Commission may waive or revise charges as required for sectoral or administrative purposes. Stakeholders have been invited to submit their comments before the final regulations are notified.

Read the full order here.

The featured photograph is for representation only.

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