HERC Issues Discussion Paper on License Terms and Conditions

HERC to set new regulations defining terms and conditions of license for a deemed licensee in Haryana. A discussion paper has been prepared.

The Haryana Electricity Regulatory Commission (HERC) has prepared a discussion paper on HERC (Terms & Conditions of License for Deemed Licensee) Regulations, 2020. A public hearing will be held by the state commission on August 28, 2020 to discuss the same.

In the discussion paper HERC has stated that these regulations once finalized will apply to all deemed to be distribution licensees functional in entire Haryana state. Without availing prior approval from the state commission any deemed licensee cannot deviate from regulations, guidelines put forth by HERC.

Key Points

  • Licensee must pay annual license fee. Failure in payment of the fee will result in the licensee being barred from conducting business.
  • Licensee must assist HERC to develop, issue and review standards, codes, and procedures proposed or notified by the state commission.
  • Licensee must forecast the demand for electricity within the ‘Area of Supply’ for 10 years in succession. It must prepare and submit such forecasts to the HERC in a timely manner and co-operate with the state transmission utility (STU) in the preparation of electricity demand forecasts for the entire state.
  • Licensee must ensure a transparent and economical power procurement process. It must provide power from alternate sources in case of outage of the sources/generator or in situations no power could be transmitted/wheeled due to congestion in the interstate transmission corridor.
  • Licensee will operate its distribution system connected to the grid sub-stations in accordance with the ‘Distribution System Operating Standards’ and the ‘Distribution Code’ approved by HERC.
  • In the absence of pre-determined power charges, a tariff equal to 1.5 times the tariff of the relevant category as determined by HERC will apply.
  • If a deemed distribution licensee utilizes the entire power for self-consumption it will be treated as an embedded or fully open access consumer as per the conditions of deviation settlement mechanism (DSM) regulations of HERC. Such consumers must pay transmission/wheeling charges, cross-subsidy surcharge and additional surcharge.

Meanwhile, HERC has asked interested parties and stakeholders to put forth their views, suggestions, objections, comments on the matter by August 20, 2020.

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Saumy Prateek

Saumy has been a writer with Reuters, Mercom India and Rystad Energy.