CERC Notifies CERC (Terms And Conditions Of Tariff) (Second Amendment) Regulations, 2026

The Central Electricity Regulatory Commission (“CERC”) by way of notification dated 20.03.2026, has notified the CERC (Terms and Conditions of Tariff) (Second Amendment) Regulations, 2026 (“Tariff Amendment Regulations”)¹, amending the CERC (Terms and Conditions of Tariff) Regulations, 2024 (“Tariff Regulations”).

The key highlights of the Tariff Amendment Regulations, inter-alia, are:

1. Integrated Energy Storage Systems included in the Principal Tariff Regulations: The Tariff Amendment Regulations increase the applicability of Tariff Regulations to all cases where the coal or lignite or gas-based thermal generating station or inter-state transmission system (“ISTS”), installs for storage and supply of electricity from the integrated energy storage system (“IESS”), for the use of the beneficiaries or the designated ISTS customers, whose tariff is required to be determined by CERC under section 62 of Electricity Act, 2003 read with section 79 thereof.
2. Supplementary tariff for IESS: The Tariff Amendment Regulations provide that tariff for IESS shall be determined separately as a supplementary tariff. The concerned entity shall apply for determination of the supplementary tariff not later than 90 days from the date of commercial operation date. The supplementary charge shall be computed based on cost of electricity used for charging the IESS and is adjusted for round-trip efficiency and auxiliary consumption of the IESS.
3. Inclusion of IESS in tariff components: Tariff Amendment Regulations have incorporated IESS in various tariff components, including capital cost, depreciation, interest on loan, working capital, additional capitalisation and operation and maintenance expenses, by specific amendments to the respective provisions.
4. Provision for additional capitalisation and cost sharing: Provisions have been introduced for additional capital expenditure on IESS, including requirement of prior consultation with beneficiaries, submission of detailed cost estimates and justification and consideration of cost benefit aspects by CERC at the stage of granting approval.
5. Regulation 101A has been introduced in the Tariff Regulations to allow participation in a regulatory sandbox for undertaking innovation and research project in the power sector, with prior approval of CERC. The additional cost for this shall be allowed up to 1% of annual fixed cost or INR 100 Crores, whichever is lower.

The Tariff Amendment Regulations shall come into force from the date of publication in the Official Gazette, except for Regulations 51 and 52, which shall be applicable retrospectively from 01.04.2024.

Footnote

1. CERC (Terms and Conditions of Tariff) (Second Amendment) Regulations, 2026.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.