Draft KERC (Procedure, Terms and Conditions for grant of Transmission License and other related matters) in respect of intra-State Transmission Projects selected through Tariff-Based Competitive Bidding – EQ
Summary:
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## Key Business Information
| Parameter | Detail |
|———–|——–|
| **Issuing Authority** | Karnataka Electricity Regulatory Commission (KERC) |
| **Notification Date** | 23 March 2026 |
| **Gazette Publication Date** | 2 April 2026 (Thursday) |
| **Comment Submission Deadline** | **Within 15 days from 2 April 2026** (approx. 17 April 2026) |
| **Regulation Name** | KERC (Procedure, Terms and Conditions for grant of Transmission License and other related matters in respect of intra-State Transmission Projects selected through Tariff-Based Competitive Bidding) Regulations, 2026 |
| **Associated Amendment** | KERC (Fee) (First Amendment) Regulations, 2026 |
| **Bid Process Coordinator** | M/s RECPDCL |
| **State Transmission Utility (STU)** | Karnataka Power Transmission Corporation Limited (KPTCL) |
| **License Validity Period** | **25 years** from date of issue |
| **License Fee** | **₹20 Lakhs per annum** (simplified from earlier per-MW basis) |
| **Tariff Adoption Application Fee** | **₹25 Lakhs** per application |
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## Why These Regulations Are Needed
| Driver | Explanation |
|——–|————-|
| **State initiative** | Karnataka is executing intra-state transmission projects through TBCB |
| **State Empowered Committee** | Constituted by Karnataka government to oversee TBCB process |
| **BPC appointed** | RECPDCL designated as Bid Process Coordinator |
| **Existing gap** | KERC (Licensing) Regulations, 2004 cover general licensing but lack specific provisions for TBCB-selected projects |
| **MoP guidelines** | Requires Commission to grant Transmission License and adopt transmission charges |
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## Key Provisions of the Draft Regulations
### Chapter 1: Preliminary
| Provision | Detail |
|———–|——–|
| **Short title** | KERC (TBCB Transmission License) Regulations, 2026 |
| **Commencement** | From date of publication in Official Gazette |
| **Key definitions** | Includes “applicant”, “agreement”, “transmission charge”, “STU” (KPTCL) |
| **Reference to other laws** | Act, Rules, Grid Code, other KERC regulations apply |
### Chapter 2: Grant of License (Process Overview)
| Step | Timeline | Description |
|——|———-|————-|
| **1. Application** | — | File in Form-I on e-filing portal with prescribed fee |
| **2. Preliminary scrutiny** | Within 7 days | Commission identifies defects |
| **3. Defect rectification** | Within 7 days | Applicant to rectify defects |
| **4. Public notice** | Within 3 working days of filing | Publish in 2 newspapers (English + Kannada) |
| **5. Public comment period** | 15 days | Objections/suggestions to be filed with Commission |
| **6. STU recommendations** | 10 days (extendable to 30 days) | STU to provide recommendations (non-binding) |
| **7. Applicant’s comments** | 7 working days | On STU recommendations and public objections |
| **8. Commission proposal notice** | — | Publish proposal in newspapers + website |
| **9. Further public comments** | 15 days | On Commission’s proposal to grant license |
| **10. Hearing** | — | Opportunity of hearing to all stakeholders |
| **11. License grant/rejection** | — | License issued in Form-III with reasons recorded |
### Chapter 3: Terms and Conditions of License
| Obligation | Detail |
|————|——–|
| **Insurance** | Maintain sufficient insurance (or self-insurance) as per prudent utility practices |
| **Project execution** | Time-bound, efficient, coordinated, economical manner |
| **Grid compliance** | Comply with SLDC directions; failure may lead to STU taking control |
| **Open access** | Provide non-discriminatory open access as per prevailing regulations |
| **License fee** | Pay ₹20 Lakh per annum by 30 April each year; 1% per month interest on delay |
| **Separate accounts** | Maintain separate accounts for each business (per KERC Revenue Sharing Regulations, 2020) |
| **Audit** | Accounts to be certified by auditors |
| **Inspection** | Commission authorized to inspect accounts anytime |
| **Information submission** | To Commission, SLDC, STU as called for |
| **Prudential reporting** | Report change in shareholding/ownership/management; report any proceedings under agreement |
### Chapter 4: Miscellaneous
| Provision | Detail |
|———–|——–|
| **Compliance procedure** | Notice → Explanation → Public notice (if needed) → Order |
| **Dispute resolution** | First through mutual consultation; then refer to Commission within 1 month |
| **Communication** | In writing; deemed received after 15 days if sent by registered post |
| **Power to relax** | Commission may relax provisions to remove hardship (reasons recorded) |
| **Power to remove difficulty** | Commission may issue orders to resolve implementation issues |
| **Suo motu powers** | Commission may issue practice directions |
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## Transmission Tariff Provisions (Regulation 10)
| Scenario | Treatment |
|———-|———–|
| **Licensee selected through TBCB** | Transmission tariff as per Transmission Service Agreement (TSA) shall be **adopted by Commission under Section 63** of the Act |
| **Modification/reconfiguration of assets** | If STU’s transmission plan requires modification of original licensee’s assets, the **additional financial implications** shall be borne by the **licensee to whom modification is assigned**, without affecting original licensee’s transmission charges |
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## Practical Recommendations for Stakeholders
### For Prospective TBCB Bidders:
1. **Review Form-I requirements** – prepare documentation in advance
2. **Factor ₹20 Lakhs annual license fee + ₹25 Lakhs tariff adoption fee** into financial models
3. **Note non-exclusivity** – no guaranteed monopoly even after license
4. **Plan for public notice** – budget for newspaper publication (English + Kannada)
5. **Engage with STU early** – to avoid delays in recommendations
### For Existing Transmission Licensees:
1. **Prepare for separate accounting** if you have multiple businesses
2. **Update compliance protocols** for prudential reporting (shareholding changes, agreement proceedings)
### For Lenders:
1. **Review revocation provisions** – 3 months’ notice required
2. **Note STU takeover provision** for abandoned projects – impacts security package
### For Industry Associations / Commenting Stakeholders:
1. **File comments within 15 days** (by ~17 April 2026)
2. **Key areas for comment:**
– Adequacy of ₹20 Lakhs fixed fee (vs per-MW earlier)
– Reasonableness of ₹25 Lakhs tariff adoption fee
– STU recommendation timeline (10 days may be insufficient)
– Dispute resolution mechanism (no mention of arbitration)
– Clarity on “self-insurance” provisions
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