Extension of Inter-State Transmission charges waiver on transmission of the electricity generated from solar and wind sources of energy, for the RE projects delayed due to delay in readiness of transmission infrastructure -reg. – EQ

Summary:

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### Background
The Ministry received representations from Renewable Energy (RE) developers seeking clarification on extending the **graded waiver of ISTS (Inter-State Transmission System) charges** for projects whose:
– **Firm start date of connectivity** falls between **1 July 2025 and 30 June 2028**, but
– **Commissioning is delayed** beyond that start date due to **non-readiness of transmission infrastructure** (not the developer’s fault).

### Key Clarification on Beneficiary
The waiver of ISTS charges **benefits the procurers** (end buyers of electricity), not the RE developers, because procurers bear the liability for paying ISTS charges under existing regulations. However, delays caused by transmission non-readiness can lead to **PPA (Power Purchase Agreement) disputes** between developers and procurers.

### Eligibility Conditions for Extended Waiver
The Ministry allows extension of the graded waiver (75% / 50% / 25%, as applicable) to such projects **if all three conditions below are met**:

| Condition | Detail |
|———–|——–|
| **i. PPA status** | Firm PPA in place as of **31 March 2026** |
| **ii. Connectivity start date** | Firm start date falls between **1 July 2025 and 30 June 2028** |
| **iii. Commissioning timeline** | Achieve COD (Commercial Operation Date) **before, or within the specified time limit from, the COD of the concerned transmission system** |

### Special Provision for Earlier Projects
Projects with **firm start date of connectivity on or before 30 June 2025** may be considered for **100% waiver** if they satisfy the relevant conditions under para 2 (i.e., PPA by 31 March 2026, and commissioning linked to transmission readiness).

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## Business Points (Key Takeaways for RE Developers, Procurers, and Regulators)

| Business Point | Implication |
|—————|————-|
| **Waiver extension formally allowed** | RE projects delayed by transmission infrastructure (not developer default) can still avail graded ISTS waiver (75/50/25%) even if commissioning is after the firm start date of connectivity. |
| **Critical eligibility date: 31 March 2026** | Only projects with a **firm PPA signed on or before 31 March 2026** qualify — no retrospective benefit for later PPAs. |
| **Connectivity window: 1 July 2025 – 30 June 2028** | Projects with firm start dates in this 3-year window are eligible for extension of waiver. |
| **Waiver percentage depends on original entitlement** | The extended benefit preserves the originally applicable graded waiver (e.g., 75%, 50%, 25%) based on commissioning timeline relative to transmission readiness. |
| **100% waiver possible for older projects** | Projects with connectivity start date **on or before 30 June 2025** can get **100% waiver** if they meet the same PPA & transmission-readiness conditions. |
| **Risk of PPA disputes reduced** | By clarifying that waiver can extend, the Ministry reduces contractual friction between RE developers and procurers over ISTS charges during transmission delays. |
| **CERC to implement** | RE developers and procurers should monitor CERC’s upcoming regulatory amendments to operationalize this extension. |
| **Not a blanket waiver** | Benefit applies only if delay is due to **non-readiness of transmission system**, not other developer-side delays. |

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