In the Matter of Directions for removal of difficulty in implementation of the CERC (Deviation Settlement Mechanism and Related Matters) Regulations, 2024 – EQ
CERC extends the existing deficit recovery mechanism and defers the new reserve-based mechanism until October 2026 due to implementation challenges.Summary
The Central Electricity Regulatory Commission (CERC) has issued directions to extend the existing deficit recovery mechanism for Deviation Settlement Mechanism (DSM) Pool deficits until October 4, 2026. This extension addresses operational challenges reported by Grid India / NLDC regarding the implementation of a new reserve-based recovery mechanism, originally slated to begin on April 1, 2026. The challenges include high reserve requirements, a lack of robust methodology for reserve quantification, difficulties in measuring reserves, and the need for a clear dispatch and settlement mechanism. CERC invoked its 'Power to Remove Difficulty' to provide this regulatory flexibility. While the interim stability of the current deficit allocation formula is maintained for approximately six more months, the NLDC is still expected to develop a detailed procedure for deficit recovery, reserve shortfall computation, and allocation among Distribution/Interface Companies (DICs). Stakeholders should prepare for the new reserve-linked allocation mechanism, but with the extended timeline.
(Source：Eqmagpro)