CERC Declines To Consider Power Exchange RTM Abortions As ‘Force Majeure’

CERC Declines To Consider Power Exchange RTM Abortions As 'Force Majeure'

The Central Electricity Regulatory Commission (CERC), in its latest judgement, declined to consider the plea of BSES Rajdhani Power Ltd, a power distribution licensee from Delhi. The discom had approached the Central Commission asking it to consider the events related to abortion and the cancellation of bids placed on the Real Time Market (RTM) of Power Exchanges as ‘force majeure’. 

BSES, in its petition, also asked the CERC to consider relieving it from the obligation of deviation charges. The local discom blamed the India Power Exchange (IEX) for aborting/cancelling its bids placed in the RTM. It said such a move compelled them to overdraw power from the grid.

The CERC, in its judgment, however, did not consider the plea of the Delhi discom to categorize the abortions and cancellations of RTM bids as ‘force majeure events.’ However, it also asked the power exchanges to work on making the online bidding under RTM more robust. The Central Commission reiterated that merely placing a bid on the RTM platform does not qualify as a license to acquire power. 

Final CERC order 

“As such, over drawal from the grid based on the assumption that the bids submitted by the petitioner for the RTM would, under all circumstances, be cleared and scheduled is untenable. Based on the analysis of the facts on record, the Commission is of the view that deviation from the schedule by the petitioner cannot be attributed to the failure of the RTM sessions,” the CERC order said.

It added, “Therefore, any exemption from the DSM charges on this ground would be inappropriate. Accordingly, the Commission holds that the prayer of the petitioner to seek exemption from the deviation charges and the prayer to transfer the DSM liability to the power exchange for the incidents referred by the petitioner on account of the cancellation of RTM sessions do not sustain.”

The background of BSES Rajdhani case 

BSES Rajdhani, in its petition before the CERC, apprised the Commission of the overall scenario. The petitioner, in his case, argued that on several instances, the IEX aborted or cancelled the RTM sessions after it placed its bids on the system. It said that the information about the cancellation was often shared de facto.

BSES Rajadhani said that due to the technical glitches of the online RTM system, the discom was forced to overdraw power from the grid. Noteworthy, the overdrawal of power by discoms from the grid against the schedule leads to penalties for deviation under the Deviation Settlement Mechanism (DSM). 

The Delhi discom, in its petition, said that due to the failure of the RTM sessions due to technical glitches, it should be held responsible for the move. Thus, it said the penalties for deviation should not be imposed on the discom.

In its reply before the CERC, IEX, in its affidavit, said that merely placing an online bid does not ensure power supply and building a contract. It is also said that a lack of timely response from the NLDC (National Load Despatch Centre) often leads to such delays. 

The Grid Controller of India, in its response, said that for any discoms, RTM should be treated as a last resort, and they need to prepare a balance and plan in advance for such procurements. Thus, both IEX and the Grid Controller of India put the onus on payment of the penalty to the Delhi discom. On the other hand, BSES appealed to the CERC and tried to push the onus on IEX owing to the failure of RTM sessions due to a technical glitch.