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CERC Introduces Structured MEC Mechanism for Delayed GNA Milestones

Central Electricity Regulatory Commission has finalised a GNA milestone extension mechanism, allowing eligible projects additional time against MECs of INR 1,000/MW/day for land (up to 3 months) and financial closure (up to 6 months), and INR 3,000/MW/day for COD (up to 12 months), rising to INR 6,000/MW/day in months 10–12.

August 17, 2026. By Mrinmoy Dey

The Central Electricity Regulatory Commission (CERC) has introduced a structured Milestone Extension Charge (MEC) mechanism for projects struggling to meet critical milestones under the Connectivity and General Network Access (GNA) Regulations, 2022.

The framework provides eligible entities with additional time to meet land-document, financial-closure (FC) and commercial operation date (COD) requirements against payment of prescribed compensation charges, while seeking to ensure timely utilisation of scarce transmission connectivity.

The procedure was finalised under CERC's powers to relax provisions of the GNA Regulations and issue suo motu orders. It follows a consultation process that received written comments from 42 stakeholders, including renewable energy developers, DISCOMs, the Central Transmission Utility and industry associations. A public hearing was subsequently held on May 19, 2026. The final procedure becomes effective from the date of issuance of the order i.e. August 14, 2026.

Under the GNA framework, failure to submit required land or financial-closure documents, or to achieve COD within the stipulated timeline, can result in revocation of connectivity. CERC noted that several entities had approached it for additional time, including projects at advanced stages of implementation. The Commission said a uniform mechanism was required to deal with such cases, allowing developers that have demonstrated project progress to retain connectivity while paying compensation for the additional time.

For land-document compliance, CERC has prescribed a base MEC of INR 1,000/MW/day for the first month. The rate increases to INR 1,100/MW/day in the second month and INR 1,200/MW/day in the third month. The maximum additional time allowed for furnishing land documents corresponding to 50 percent of the connectivity quantum is three months.

For financial closure, the base charge is also INR 1,000/MW/day. The rate applies for the first three months and increases progressively to INR 1,100/MW/day in the fourth month, INR 1,200/MW/day in the fifth month and INR 1,300/MW/day in the sixth month. The maximum additional time permitted for achieving FC is six months.

The COD milestone carries a higher charge, with MEC fixed at INR 3,000/MW/day for the first six months of additional time. The rate rises to INR 3,300/MW/day in the seventh month, INR 3,600/MW/day in the eighth and INR 3,900/MW/day in the ninth month. For months 10 to 12, the charge rises to INR 6,000/MW/day. The maximum additional time for achieving COD is 12 months.

The extension is not automatic. Applicants must demonstrate project progress and satisfy prescribed eligibility conditions. For COD extensions, entities following the Land BG or Land route must furnish land documents for 75 percent of the required land, while those following the LOA/PPA route must furnish documents for 50 percent. Applicants must also provide details of contracts executed for major or key equipment and civil and electrical works.

Developers seeking additional time must approach the nodal agency in advance. CTUIL will scrutinise the documents and communicate deficiencies, if any. Once eligibility is established, the applicable MEC must be paid. The mandatory advance payment is for 15 days, although entities may pay for a longer period based on their estimated delay.

CERC has also clarified that MEC is a facilitative mechanism and not a relaxation of project obligations. The additional time does not modify, dilute or override the terms of a project's PPA, including provisions relating to liquidated damages. MEC is payable irrespective of the reason for the delay once the developer opts for the mechanism and satisfies the eligibility requirements.

The framework provides a partial refund mechanism for land and FC-related MEC. If a project subsequently achieves COD without requiring a COD extension under the procedure, 50 percent of the MEC paid for additional time for land and FC compliance will be returned, subject to the specified conditions. For partial COD, the refund applies on a pro-rata basis.

CERC has further directed that MEC proceeds be used to reduce monthly transmission charges under the Sharing Regulations.

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CERC suto motu order

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MEC for delayed projects