Draft CERC RLDC Fees and Charges Regulation 2024

- Applicable from 1.4.2024 to 31.3.2029

- Regarding Fees to be collected by RLDC from all Users

- Adcap == CAPEX incurred/ projected by RLDC or NLDC and admitted by CERC

- Annual LDC Charge == ARR of RLDC/ NLDC approved by CERC

- LPS Base Rate @ MoP LPS Rule 2022

- LPS == charge for payment beyond RLDC Bill Due Date

- Buyer == GNA / T-GNA scheduled or metered or accounting done by RLDC

- CAPEX == Capital Nature expense for the RLDC or NLDC

- Charges == Monthly basis payment collected by RLDC for RLDC/NLDC/POSOCO Service

- Defaulting Entity == User with outstanding Annual LDC Charge (allocated as ARR of RLDC/ NLDC)

- Default trigger date

(a) Later of (30 days from after payment due date, 75 days from bill presentation by RLDC)

(b) next working day from Payment Security Mechanism Replenishment Date

?

- Due Date == 45 days from bill presentation

- Effective Tax Rate @ CERC Tariff Reg 2024-29

- Expenditure Incurred == Debt or Equity (except liability for which no payment made)

- Fees == collected by RLDC for Grid Access or scheduling or purposes directed by CERC

- Forum of Load Despatchers == FOR + RLDC +NLDC +SLDCs

- Grid Access == permission given by RLDC to a User on meeting technical requirements

- HR Expense == Hr expenditure on RLDC or NLDC

- Market Operation Function == Power Market Functions

- O&M == Expense towards RLDC/ NLDC Asset O&M. Excludes HR Expense

- Reference RoI == 1 yr SBI MCLR + 325 bps

- Regional Entity == scheduling, metering , energy accounting by RLDCs

- Regulatory Pool Account == Account as per CERC Orders & handled by RLDCs, NLDC for DSM , Reactive Energy Charges, Ancillary Services Operation, Congestion Charges and Congestion Revenue amount due to market splitting etc etc

- Scheme == facility or equipment installed at RLDCs, NLDC, POSOCO

- Seller == GNA / T-GNA scheduled or metered or accounting done by RLDC (except genco)

Users == entity which may use services of the RLDCs and NLDC from time to time

?

?

Application

- Intending User to apply 30 days before intended date of Grid Access

- Genco for its New Unit Addition or Transco for New element addition for the grid Access need to intimate RLDC 30 days before the intended Grid Access

- Buyer / Seller to apply 30 days before intended date of Grid Access

- Interested P.Exchanges & Trader to register 30 days before intended date for availing RLDC or NLDC services

- RLDC or NLDC to give the 4 above mentioned intended access/ services by asking for complying within the deficiency in Application in 1 week and later on correction of defeciencies ?registering the applicant

- De-registration of user by the Rldc and NLDC with 1 month Notice in case of Termination of Connectivity/ GNA or not paying billed amount within 120 days of due date

?

?Functions

- Market Operation Functions : Grid Access facilitation, Open Access, managing interchange schedules, RTM, DAM, TAM, Ancilary Service Market, interface energy metering

?

- Registry Functions- Schemes of the Govt or CERC

?

- Sytem Operation Functions - planning, scheduling, dispatching power, analysis, information sharing, and other assigned tasks? as per regulations.

?

?

- RLDCs and NLDC shall formulate the plan for capital expenditure (CAPEX plan) for the creation of new assets during the control period duly approved by the Board of Directors of Grid-India

- where the additional capital expenditure involved for CAPEX is more than 20% of the capital expenditure approved for the control period, a separate petition may be filed during the control period

?

Buyers, bulk consumers, sellers, Qualified Coordinating Agencies (QCAs) and Settlement Nodal Agency (SNA), power exchange, inter state traders and the Users as per defination are considered as users as per this Regulation

- Annual LDC charge truing up => capex admitted on 31.03.2024 is the opening capital cost for FY 2024-29

- The NLDC on behalf of RLDCs and itself should file a petition within 180 days from the date of this regulation for the cost incurred till 31.3.2024 & cost to be incurred in FY 2024-29 and also seek public comments on the petition

- the annual LDC charges of for the control period shall be apportioned among Regional Load Despatch Centres on the basis of the GNA of the drawee DICs located in the respective region as on 31.3.2024.

- NLDC shall file a petition on behalf of RLDCs and NLDC (including Corporate Centre) by 31.10.2029, for carrying out truing up exercise after the end of the control period.

- NLDC and RLDCs to refund the additional recovery of fees and charges to the users by 30th September of the following year @ Reference RoI in 6 monthly ?installments

- mid-term True-up Petition on behalf of RLDCs and NLDC, not before two years from the date of commencement of these Regulations in case of emergent situation

?

- IDC on normative loan corresponding to excess equity over 30% of funds deployed shall be allowed only in case the actual infusion of equity on a quarterly basis is more than 30% of total funds deployed on a pari-passu basis.

- Provided further that in case IDC on normative loan is to be allowed prior to infusion of actual loan, RoI ?shall be equal to 1-year SBI MCLR of the respective year. IDC on normative loan, post infusion of actual loan is Weighted Average Rate of Interest (WAROI) for that respective quarter.

- Any revenue earned during the construction period up to completion, on account of interest on deposits or advances or any other receipts shall be taken into account for a reduction in the IEDC.

- ?If the delay in achieving the completion of the project is not attributable to the RLDC or the NLDC, as the case may be, IDC and IEDC, for the delayed period, may be allowed after prudence check and the liquidated damages, if any, recovered from the contractor or supplier or agency shall be adjusted in the capital cost of the RLDC or the NLDC, as the case may be.

?

-Actual ?Debt Equity Ratio of FY 2019-24 will be used to calculate opening capital cost of FY 2024-29

- Debt Equity Ratio of FY 2019-24 determination as per CERC RLDC Fees and Charges Regulation 2019

- capital expenditure incurred or projected to be incurred on or after 1.4.2024, the debt-equity ratio shall be considered as 70:30. If the equity actually deployed is more than 30% of the capital cost, equity in excess of 30% shall be treated as normative loan:

?

Fees and Charges Structure

- LDC Charge for Grid Access and Other Services

- Annual LDC Charge for scheduling. Includes RLDC / NLDC Incentives. Recoverable Monthly.

- Annual LDC Charge for RLDC = = RoE + Interest on loan capital + Depreciation + Operation and maintenance expenses + Human Resource expenses + Interest on working capital

- NLDC Charges to be apportioned to RLDCs on the basis of the GNA of the drawee DICs located in the respective regions as on 31.03.2024

?

- Performance Linked Incentive to RLDCs

RoE for Annual LDC Charges

- RoE pre tax base rate to be 15.5% which is grossed up as per finance acts

- Rate of pre-tax return on equity = Base rate/ (1-t) Where, ‘t’ is the effective tax rate as per finance acts

IoL for Annual LDC Charges

- rate of interest shall be the weighted average rate of interest calculated on the basis of the actual loan portfolio or allocated loan portfolio, applicable to the respective Regional Load Despatch Centre:

-? Provided that if there is no actual loan for a particular year but the normative loan is still outstanding, the last available weighted average rate of interest shall be considered;

- Provided further that if any of the Regional Load Despatch Centre does not have an actual loan, then the weighted average rate of interest on the loan of Grid-India as a whole shall be considered.

- net saving out of loan refinancing or restructuring to be shared 50:50 between the users and POSOCO.

Depreciation for Annual LDC Charges

- Salvage value == 10%

- Deoreciation in SLM as per Appendix II rates

O&M for Annual LDC Charges

- escalation annually @ 5.25%

- any significant O&M expense envisaged during the control period be allowed on prudence check

HR Expenses for Annual LDC Charges

- annual escalation @ 5.25%

- Any significant Human Resource Expenses envisaged during the control period be allowed on prudence check

- PRP be met out of Incentives

- strength of manpower required for effective functioning of LDC as per CERC

IoWC for Annual LDC Charges

- O&M Expense 1 month + HR Expense 1 month + Receivables of 45 days

- IoWC Rate == Reference Rate of Interest as on 1.4.2024 as per Tariff Regulations

LDC Development Fund

- The charges on account of return on equity, interest on loan, depreciation, registration fees, Charges for scheduling under T-GNA, REC Charges, PAT Charges and interest earned on LDCD Fund shall be deposited into the LDCD Fund after meeting the statutory tax requirements.

?

- Shortfall in revenue expenditures, including O&M expenses, met from LDCD Fund

- Load Despatch Centre can take interest-free advance from LDCD Fund

- Advance recouped from allowed expenditure by Commission during truing up

- Assets funded from LDCD Fund considered for depreciation calculation

- Amount taken out treated as notional loan, carries normative interest rate

- RLDCs/NLDC may use fund for annual charges shortfall or contingency expenses

- Grid-India to report fund accumulation and sources annually to Commission

- Report on LDCD Fund utilization submitted yearly with auditor's certificate

- Commission may issue directives for effective LDCD Fund utilization

?

- Licensees + Bulk Consumer pay application fee of 15 lakh for Grid Access

- Any new element addition or GNA Quantum addition information be given to RLDC by 10th of every month.

- Generating stations having installed capacity of more than 100 MW and up to 500 MW: Rs. 7.5 Lakh registration fees;

- Generating stations having installed capacity of more than 500 MW and up to 1000 MW: Rs. 10 Lakh registration fee;

- the entire capacity of the generating station or stage there of whose scheduling, metering and energy accounting is done separately shall be considered for the purpose of registration fees at the time of the initial registration:

- The inter-State trading licensees, Renewable Power Park Developer, Qualified Coordinating Agency (QCA), SNA, sellers and buyers shall pay one-time registration fees of Rs.15,000.00 (Rupees Fifteen Thousand only) along with application for commencement of scheduling for market operation. (

- The Power exchanges shall pay Rs.30.0 Lakh (Rupees Thirty Lakh only) as one-time registration fees to NLDC

- All other users shall be liable to pay one-time registration fees of Rs. 15,000? along with the application for commencement of grid access.

- Monthly LDC Charge == Annual LDC Charge/12

- monthly LDC charges shall be recovered 1/3rd each from the three categories viz

(a) the inter-State transmission licensees ( on basis of the circuit kilometres (ckt-km) of the lines and MVA capacity of substation),

(b) generating stations and sellers ( on basis of installed capacity in the case of the generating station and GNA in the case of sellers )

(c) distribution licensees . bulk consumers, SNA and buyers shall be worked out on the basis of GNA to such entites.

?

- rates of LDC charges for generating companies, sellers, and SNA shall be computed on an annual basis and recovered on a monthly basis in accordance with following formula:

Monthly LDC Charge rate (for Generating station or seller or SNA) = (1/3) (ALC/ (Capacity)) / 12 in Rs. / MW

Where,

ALC = Approved Annual LDC Charges;

Capacity=Aggregate Installed capacity (in MW) of generating stations, GNA quantum (in MW) of the sellers (rounded off to the nearest two decimals),

SNA (for the purpose of injection into Indian Grid), whose scheduling and energy accounting is covered under the concerned RLDC as on last day of the month prior to the month of billing;

- The monthly LDC charges for generating station or sellers or SNA shall be computed on the basis of rates determined above and the respective installed capacity (MW) or the GNA quantum (MW) of the generating station or seller or SNA respectively.

- respective State Load Despatch Centre (SLDC) shall be the nodal agency for collection of monthly LDC charges payable to the concerned Regional Load Despatch Centre (RLDC) from the distribution licensees and other RLDC users in the State

?

- For facilitating direct billing and collection from individual distribution Licensee or buyer or seller in a State, the GNA quantum granted to STU/State for the previous month segregated for each intra-State entity shall be shared by CTUIL with respective RLDC by 10th day of every month for the quantum as on last day of the previous month. The same quantum shall be considered for billing monthly LDC charges for the respective RLDC.

?

Performance Linked Incentive:-

- Each RLDC and NLDC shall be allowed to recover incentive of 12% of its Annual LDC Charges for performance level of 90% against the KPIs.

- incentive shall increase by 1% of Annual LDC Charges for every 5% increase of performance above 90% on a pro-rata basis.

- incentive shall be reduced by 1% on a pro-rata basis for every 3% decrease in performance level below 90%.

- Performance linked incentive shall be trued up at the end of the control period.

- Incentive to the employees of RLDCs and NLDC for acquiring the Certification for expertise in LDC works

- Persistent default in payment of LDC charges by any user shall be brought to the notice of the Commission.

- The charges payable by the user shall be first adjusted towards a late payment surcharge on the outstanding charges and, thereafter, towards monthly charges billed by RLDCs starting from the longest overdue bill.

?

- The rate of late payment surcharge for the successive months of default shall increase by 0.5 per cent for every month of delay provided that the late payment surcharge shall not be more than three per cent higher than the base rate at any time.

- A user of RLDC shall maintain an unconditional, irrevocable, and adequate PSM in the form of a Letter of Credit.

- For the existing users, the PSM shall be equivalent to 110% of last year’s maximum monthly LDC Charges,

- ?For the new users, the PSM shall be 110% of the first month’s LDC Charges.

- In case of non-maintenance of PSM, RLDC may regulate open access to users

- If an adequate payment security mechanism is not maintained, user may make an advance payment to avoid the consequences of default

Regulation of access to defaulting entities:--

?

- Non-payment/non-maintenance triggers regulation of electricity supply scheduling

- T-GNA for sale/purchase of electricity regulated entirely after default trigger date

- NLDC may temporarily review T-GNA regulation under exceptional circumstances

- Unpaid dues after one month result in 10% regulation of transactions under GNA

- Reduction/withdrawal of scheduling under GNA increases by 10% for each month of default

- CTU transfers due amount for RLDC from recovered amount towards yearly charges for defaulting transmission licensee within 7 days of intimation by NLDC

- Regulation ceases and access restored within two days upon payment of outstanding dues

?

- RLDCs can directly recover hedging or foreign exchange rate variation costs from users

- Users can object to these costs, prompting RLDCs to file a petition before the Commission for decision

- Rebate @ 1.5% for payment in 5 days

- Rebate @ 1.0% for payment in 30 days

- : In case of complete isolation from the grid due to natural calamities for long duration, the user may request the concerned RLDC for de-registration on a temporary basis. The user will have to apply for reregistration

- Dispute Resolution as per Central Electricity Regulatory Commission (Conduct of Business) Regulations, 2023, as amended from time to time.

?

?

?

?

?

?

?

?

?

?

-

?

?

?