Welcome Back! CERC Order on Connectivity for RE projects With ISTS Connections

On February 20, in one of its more far-reaching orders since reconvening with the addition of a member legal, the Central Electricity Regulatory Commission (CERC) has released its new order on regulation 27 of the CERC (Grant of Connectivity, Long-term Access and Medium-term Open Access in inter-State Transmission and related matters) Regulations, 2009.

The order by a full three-member bench details the procedure for “Grant of Connectivity to projects based on renewable sources to inter-State transmission system” that came into force with effect from 15.5.2018. This procedure was put up for revision after feedback from the industry and other stakeholders and a draft amendment to the pre-revised Procedure was notified on 24.07.2020 inviting comments/ suggestions/ objections from stakeholders and interested persons by 16.8.2020 on the provisions proposed to be amended.

Twenty Seven (27) stakeholders submitted their comments/ suggestions/objections on various provisions of the draft amendment to the Pre-revised Procedure.

After their feedback and the commission’s own considered views, some key changes have been made that the commission must hope will satisfy most stakeholders. So just what are these key changes?

While the detailed order has been linked above, we believe key aspects include placing the onus of connectivity firmly on the transmission firm is a good start. From responding within 60 days to applications from RE producers to specifying the power carrying capacity of transmission lines.

CAPACITY OF DEDICATED POWER LINES

Connectivity grated on ISTS can also be used for Intra State Sale Of Power, for instance.

Specifying that conditions like change in the location of the project keeping the connectivity with ISTS substation same shall not be construed as a material change in the location under the first provision to Regulation 8 (1) of Connectivity Regulations certainly helps clear issues that have led to disputes and delays earlier.

Similarly, in a measure that will simplify paperwork, now renewable hybrid projects including Round the Clock (RTC) Hybrid Projects, shall be eligible to apply for separate Stage-II Connectivity for each location based on the same LOA or PPA, for the capacity of the project not exceeding the quantum of power for which LOA has been awarded or PPA has been signed.

For stage 2 connectivity, it also specifies key conditions that need to be met, including ownership or lease rights or land use rights of the land, (ii) Financial closure with sanction letter from the financial institution, and (iii) Proof of release of funds duly supported by Auditor’s certificate.

Again, taking aim at a key dispute area, the order says in case of Applicants who have been granted Stage-II Connectivity under Clause 9.2.2 but are subsequently covered under Clause 9.3.1, the last date for completion of the dedicated transmission line(s) and generator pooling station(s) shall be the SCOD of the project.

Similarly, the rules on co-applicant for a transmission line, and the process for the same, have also been specified in the order. Formats for application and more are also available in the same now for readers looking for full details. (see link in line 2)

We believe the order is broadly in consonance with the MNRE and Power Minister’s assurances to the sector that ease of doing business would take precedence. Thus, from laying down clear timelines for processing, to guidelines on issues that have regularly clogged up the courts, the order makes a clear effort to make an impact.

The proof of the pudding will of course be industry feedback, which we hope to get soon. Most firms we spoke to have broadly welcomed the order, although at least two firms embroiled in existing litigation have specific issues they have sought clarifications on.