CERC Proposes SNA Charge of Rs 1 paise/kWh For Cross Border Power

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The Central Electricity Regulatory Commission (CERC) has now proposed amending its older regulations for cross-border power trade. It has now proposed two new amendments to make these new changes. The new change proposes leaving an additional charge for the Settlement Nodal Agency (SNA) for the process.

The CERC claimed this was due to costs like manpower, legal expenses and others. It claimed that the current transactions between the NTPC Vidyut Vyapar Nigam (NVVN) and the SNA stand at around Rs 8500 Million Units (MU) per annum.

“The costs towards manpower; office expenses; legal expenses; Letter of Credit (LC)/bank related charges; and overheads have been estimated to be in the range of Rs. 8 crore per annum. The current transactions being handled by NVVN as an SNA are to the tune of 8500 MUs per annum. This, together with normative interest on working capital (SBI MCLR of one year tenor plus 350 basis points) translates to per kWh cost of approximately 1 (one) paise. Accordingly, the Commission proposes an SNA Charge of 1 (one) paise/kWh,” the explanatory note on the issue issued by the CERC read.

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The Commission asked the stakeholders and the public to comment on the issue by the end of September 11. Before implementing CBTE Regulation 2019, the existing SNA, NVVN, had collected SNA charges under their mutual Agreement. CERC said that the Commission proposed changes to the Cross Power Power Trade Regulations of 2019 to recover reasonable expenses by the SNA.

The new draft norms proposed an amendment to Clause 2 of Regulation 30 of the principal regulations. “Settlement Nodal Agency may recover SNA charge of One (1.00) paise/kWh from the cross-border customers and shall put in place a suitable payment security mechanism for the charges to be collected by it,” the new norms read. 

Another amendment added a new clause (tt-A) of the principal regulation in Section 2 (1) to include the definition of SNA charge. It read, “ ‘Settlement Nodal Agency Charge’ or ‘SNA Charge’ means the charge payable to the SNA by the cross-border customers for discharging the mandated functions.”

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