Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

The Odisha Electricity Regulatory Commission Proposes Framework for Grid Support Charges on Captive Power Plants

The Odisha Electricity Regulatory Commission (OERC) has released draft regulations proposing a formal mechanism to levy grid support charges (GSCs) on captive generating projects (CGPs) that operate in parallel with the state’s electricity grid.

Stakeholders have been invited to submit comments and suggestions by February 23, 2026. Following the consultation process, the draft titled “Grid Support Charges for Captive Generating Projects Regulations, 2026” may be revised and subsequently notified in the Official Gazette.

Purpose of the Draft Regulations

OERC stated that the draft rules aim to account for grid support services provided to conventional captive generators connected to Odisha’s intrastate transmission and distribution network. These services are essential for ensuring the safe, stable, and reliable operation of CGPs operating alongside the grid.

According to the Commission, grid support services include:

• Fault-level support
• Voltage and frequency regulation
• Reactive power support
• Harmonics absorption
• No-load loss support
• Overall grid availability

The proposed regulations draw authority from multiple provisions of the Electricity Act, 2003, including Sections 9(2), 39, 40, 42, 61, 62, 86, and 181(2).

Applicability and Scope

The draft framework will apply to all co-located conventional CGPs that are connected to and operate in parallel with the grid, irrespective of whether they continue to meet captive status criteria under the Electricity Rules, 2005.

OERC noted that the objective is to ensure appropriate compensation to the transmission licensee for costs incurred in providing grid support services, while establishing a transparent, uniform, and technically robust charging mechanism across the state.

Proposed Methodology for GSC Calculation

The Commission has proposed a base-MVA support methodology to calculate monthly grid support charges. The base MVA represents the minimum dependable grid support capacity available to a CGP at the point of common coupling.

The monthly GSC payable by a CGP will be calculated using the following formula:

GSC i = Base MVA i × GSC ( MVA )

Where:

• GSC i is the monthly grid support charge payable by the ith CGP (Rs/month)
• Base MVA i is the base MVA of the ith CGP
• GSC ( MVA ) is the grid support charge rate per MVA per month (Rs/MVA/month)

The base MVA will be determined as the installed capacity of the CGP minus its contract demand and scheduled open access exports, with safeguards to ensure the value does not fall below zero.

Charges, Billing, and Control Period

Under the draft, the average GSC rate per MVA per month will be computed based on:

• Approved annual revenue requirement of Odisha Power Transmission Corporation (OPTCL)
• Total installed generation capacity in the state
• System fault contribution
• Total fault level at the interconnection point

The calculated rate will be uniformly applicable to all eligible CGPs for the proposed control period from April 1, 2027, to March 31, 2029.

Distribution licensees will be responsible for monthly billing and collection of GSCs. They will retain 2 percent of the collected amount as administrative and collection charges, with the remaining amount remitted to the transmission licensee.

The draft regulations also grant OERC powers to remove implementation difficulties, relax provisions, amend regulations, and issue binding interpretations.