The Central Electricity Regulatory Commission (CERC) has released a draft notification proposing the Fifth Amendment to the Sharing of Inter-State Transmission Charges and Losses Regulations, 2026. Issued under the provisions of the Electricity Act, 2003, the proposed amendments are intended to improve the framework governing inter-state transmission charges, grid operations, renewable energy integration, and energy storage systems. The draft also introduces greater clarity on transmission charge waivers and operational procedures for projects connected to the national grid.

One of the key proposals relates to the calculation of transmission deviations for entities connected to both the State Transmission Utility (STU) and the Central Transmission Utility (CTU) networks. Under the proposed rules, regional entities with dual connectivity will have their scheduled or actual drawals through STU feeders added to the State’s net drawal or deducted from its net injection, depending on the meter readings. For drawee entities operating with dual connectivity, transmission deviations will be calculated when the net metered drawal exceeds the combined capacity of their inter-state General Network Access (GNA) and the access available through the STU network. These changes are expected to improve the accuracy of deviation accounting and ensure better coordination between state and central transmission systems.

The draft regulations also provide important clarifications regarding the treatment of Battery Energy Storage Systems (BESS), reflecting the growing importance of energy storage in India’s renewable energy transition. CERC has proposed that BESS installed as an integral part of Renewable Energy Generating Stations (REGS) or Renewable Hybrid Generating Stations (RHGS) will be eligible for inter-state transmission charge waivers for up to 25 years from the date of commercial operation. This benefit will apply only if the renewable generation plant and the storage system are scheduled as a single integrated generating station.

Another significant proposal focuses on the operational classification of battery charging cycles. The regulations distinguish between charging cycles where a battery is charged using electricity generated by a co-located renewable energy plant and those where it is charged from other sources. To ensure transparency and consistency, the National Load Despatch Centre (NLDC) will develop detailed procedures for accounting and monitoring the energy used in different charging cycles.

The draft also introduces provisions supporting Energy Storage Systems (ESS) participating in green power markets. Under the proposal, ESS operators purchasing electricity through collective transactions in the Green Day Ahead Market will be allowed to count that energy toward meeting the mandatory requirement that at least 51% of their charging energy comes from renewable sources. This benefit will be available subject to verification certificates issued by the respective power exchanges, helping encourage greater participation in green electricity markets.

Another major feature of the proposed amendment is the introduction of relief measures for renewable energy developers facing project delays due to unavailable transmission infrastructure. Solar, wind, and hybrid projects that have signed power purchase agreements or similar contracts for a minimum duration of seven years on or before December 31, 2026, may continue to receive transmission charge waivers even if their commissioning is delayed because the required transmission network is not ready. The waiver levels will range from 100% to 25%, depending on the originally scheduled commencement date specified under the applicable regulations.

To qualify for these waivers, developers must commission their projects within two months of the General Network Access becoming operational. They must also submit copies of the relevant contracts to CTUIL and the NLDC by January 31, 2027. In situations where a project becomes eligible for more than one transmission charge waiver provision, developers will be required to submit a binding undertaking within 15 days of achieving commercial operation, specifying the waiver option they choose to avail.

The draft amendment also outlines the implementation process following the final notification. The Implementing Agency will be required to publish updated operational procedures within 60 days after completing stakeholder consultations. In addition, the proposed regulations authorize the CERC to issue suo motu orders and practice directions whenever necessary to address operational issues and facilitate the effective implementation of the regulations.

Overall, the proposed Fifth Amendment aims to strengthen India’s inter-state transmission framework by improving deviation accounting, providing greater clarity on renewable energy and battery storage integration, supporting delayed renewable projects through structured waiver mechanisms, and enhancing operational flexibility for grid management. The draft reflects CERC’s continued efforts to create a more transparent, efficient, and renewable-friendly electricity transmission system while supporting the country’s rapidly expanding clean energy and energy storage sectors.