Petition with CERC (Procedure, Terms and Conditions for Grant of Transmission License and other related matters) Regulations for Transmission system with RE applicant(s) at Navinal (Mundra)(GIS) – EQ

Summary:

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### 1. Overview of the Hearing

This document is a “Record of Proceedings” from a CERC hearing regarding the grant of a transmission license. Navinal Transmission Limited (NNTL) is seeking a license to build a transmission system to connect Renewable Energy (RE) applicants at Navinal (Mundra) in Gujarat. The project is proposed under the **Regulated Tariff Mechanism (RTM)** , meaning the tariff will be cost-based and regulated by CERC rather than being discovered through competitive bidding (TBCB).

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### 2. Key Business & Regulatory Directives

The core of this proceeding revolves around a significant **cost variation** in the project. CERC has paused the licensing process to seek clarifications on this financial discrepancy.

#### A. The Cost Discrepancy (Critical Issue)
The Commission highlighted a major variation in the estimated project cost:

– **Cost as per CTUIL’s communication to TSP:** ₹83.06 Crore
– **Cost approved by NCT (31st Meeting, 14.07.2025):** ₹105.09 Crore
– **Cost estimated by Petitioner (NNTL):** ₹144.89 Crore

**Business Implication:** The cost estimate has increased by over **74%** from the initial CTUIL estimate (₹83 Cr) to the Petitioner’s estimate (₹144 Cr). CERC is scrutinizing whether this increase is justified or if it will lead to an unnecessarily high tariff burden on beneficiaries (Discoms/RE Generators).

#### B. Specific Information Required by CERC
CERC directed **CTUIL** (not the Petitioner) to file the following information on affidavit within one week:

1. **OM Communication:** A copy of the Office Memorandum (OM) by which CTUIL communicated to the Transmission Service Provider (TSP) to implement the scheme under RTM at the initial estimated cost of **₹83.06 Crore**.

2. **Revised Cost Approval:**
– When the cost of the Associated Transmission System (ATS) was revised to **₹105.09 Crore** (approved in the 31st NCT meeting on 14.07.2025), was this revised cost communicated to and accepted by the **connectivity grantee** (the RE generator who will use this line)?
– *Business Implication:* CERC wants to ensure that the primary beneficiary of the line is aware of and has agreed to the cost escalation.

3. **Comments on Cost Variation:** CTUIL must provide its official comments/explanations on the wide variation between the NCT-approved cost (₹105.09 Cr) and the Petitioner’s claimed cost (₹144.89 Cr).

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### 3. Project Background & Mechanism

– **Project:** Transmission system at Navinal (Mundra) (GIS – Gas Insulated Switchgear).
– **Route:** Regulated Tariff Mechanism (RTM).
– *Context:* In RTM, the project is awarded by the CTUIL, and the tariff is determined later by CERC based on actual prudent cost. This contrasts with the Tariff-Based Competitive Bidding (TBCB) route, where the tariff is discovered through bidding.
– **Risk:** The RTM route places a greater burden on the regulator to scrutinize costs to ensure they are “prudent” before passing them on to consumers.

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