GERC Proposes New Banking Charge Framework, Retains INR 1/Unit till March 2027
GERC proposes a new banking charge framework, retaining INR 1/unit till March 2027 and introducing INR 0.50–1.50/unit limits thereafter.
June 24, 2026. By EI News Network
The draft Sixth Amendment to the Terms and Conditions for Green Energy Open Access Regulations, 2024, establishes a two‑phase approach that will initially set banking charges at a flat rate of INR 1.00 per unit from September 1, 2026, through March 31, 2027, and thereafter replace this with a dynamic computation model based on actual grid data, market prices, and operational parameters, effective from April 1, 2027.
The proposed methodology, detailed in a newly added Annexure‑I, represents a departure from the earlier fixed‑rate regime by mandating a slot‑wise analysis at 15‑minute intervals for each renewable energy open access consumer, factoring in actual injection, consumption, market clearing prices from the Indian Energy Exchange, variable generation costs of marginal thermal and gas stations, transmission charges, losses, backing‑down costs, and battery energy storage system charges.
The computation distinguishes between peak and off‑peak periods and between scenarios where the IEX market clearing price is higher or lower than the variable cost of marginal generation, with the Commission specifying percentage allocations for selling surplus on the exchange, utilising BESS, or backing down own generation, thereby ensuring that the banking charge reflects the actual net revenue impact on the distribution licensee for every 15‑minute block throughout the billing cycle.
Under the proposed rules, surplus energy injected during peak periods when IEX prices exceed marginal generation costs will be partially sold on the exchange, with X per cent sold and the remainder used internally through backing down of thermal units, while during off‑peak periods Y per cent will be sold and Z per cent utilised for charging BESS, with the rest backing down generation. Conversely, when IEX prices are lower than marginal costs, no sale on the exchange occurs and all surplus is either used internally or for BESS charging.
For energy drawl scenarios, if IEX prices exceed marginal costs after transmission adjustments, the deficit during off‑peak will be met entirely through thermal ramping, while during peak periods a portion will be supplied from BESS and the remainder from thermal ramping; if IEX prices are lower, the distribution licensee will procure a specified percentage from the exchange, utilise BESS during peak periods, and ramp up thermal generation for the balance.
The banking period will be one calendar month, with cumulative banked energy computed on a First‑In‑First‑Out basis separately for peak and off‑peak periods, and the regulations stipulate that net surplus banked during off‑peak cannot be utilised during peak hours, though banked energy from peak periods may be used in both peak and off‑peak slots. The total cumulative banking at any point is capped at 30 per cent of the consumer’s total monthly energy consumption from the distribution licensee, and any remaining banked energy at the end of the billing cycle, along with any injection beyond the threshold, shall be deemed lapsed. The banking charge for each month will be derived by dividing the aggregate net revenue impact on the distribution licensee, computed from all 15‑minute slots, by the total banked energy after excluding lapsed energy.
To provide certainty to both consumers and distribution licensees, the Commission has proposed a floor rate of INR 0.50 per unit and a ceiling rate of INR 1.50 per unit, subject to the condition that the distribution licensee submits complete, accurate, and sufficient data in the prescribed format and timelines. In the event that a distribution licensee fails to provide the required data, the banking charges for that licensee shall be considered nil until such data is furnished, and a deemed revenue equivalent to one paisa per unit per annum of the total energy handled during the year will be adjusted in the aggregate revenue requirement to ensure that the consequences of non‑compliance are not passed on to green energy consumers or other consumers.
All distribution licensees are mandated to maintain and provide, through a sworn affidavit, complete and accurate data for computation of banking charges in the manner, format, and timelines specified by the Commission, with the SLDC or other designated authorities empowered to verify the submitted information.
The Commission may also consider determining a common banking charge applicable uniformly to all State Government‑owned distribution licensees, namely DGVCL, PGVCL, MGVCL, and UGVCL, as well as to small distribution licensees procuring power solely from these entities, and similarly for multiple private licensees having common power procurement arrangements. Existing distribution licensees supplying electricity in SEZs, SIRs, ports, and any new distribution licensees may be subject to the same banking charges as applicable to the State Government‑owned licensees, as per the Commission’s discretion.
The draft regulations propose a data-based framework for determining banking charges by considering renewable energy injection and drawal patterns, market prices, generation costs, transmission charges and battery energy storage systems.
The Commission has invited stakeholders to review the detailed methodology, which includes definitions for over twenty parameters ranging from intra‑state transmission charges to levelised solar tariffs and BESS landed costs, and has scheduled the fixed‑rate transitional period to provide the industry with sufficient time to adapt to the new computation framework.
please contact: contact@energetica-india.net.
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