CERC Approves Performance Linked Incentives for Load Despatch Centres for FY 2022-23 Under Electricity Act S.28 and 2019 Regulations - 2025-04-04

CERC Greenlights Performance Incentives for Load Despatch Centres in FY 2022-23

New Delhi, [Date of Article Generation] – The Central Electricity Regulatory Commission (CERC) has approved Performance Linked Incentives (PLI) for the National Load Despatch Centre (NLDC) and all Regional Load Despatch Centres ( RLDCs ) for the financial year 2022-23. This decision, issued on March 29, 2025, comes in response to a petition filed by GRID-INDIA's NLDC, seeking approval for incentives based on the performance of these critical power system operators.

Performance-Based Incentives Approved

The CERC, comprising Chairperson Shri Jishnu Barua and Members Shri Ramesh Babu V and Shri Harish Dudani, issued the order under sub-section (4) of section 28 of the Electricity Act 2003, read with Regulation 32 of the Central Electricity Regulatory Commission (Fees & Charges of Regional Load Despatch Centre and other related matters) Regulations, 2019. The approval follows a detailed assessment of the NLDC and RLDCs ' performance against a set of Key Performance Indicators ( KPI s) for the period ending March 31, 2023.

Case Background: NLDC's Petition for FY 2022-23 PLI

The petition was filed by the National Load Despatch Centre, Grid Controller of India Limited (GRID-INDIA), and addressed to a wide array of respondents, including users of the Northern, Western, Southern, Eastern, and North Eastern Regional Load Despatch Centres. These users span across distribution licensees, buyers, generating stations, sellers, and interstate transmission licensees, encompassing a broad spectrum of entities within the Indian power sector.

NLDC’s petition was in compliance with a previous CERC order dated March 28, 2023, directing the consolidated filing for PLI approvals. The core prayers of the petitioner included:

Approval of KPI scores for FY 2022-23.

Authorization of PLI percentages of Annual Charges as incentive.

Permission to recover the approved PLI amount from users.

Regulatory Framework and KPI Assessment

Regulation 32 of the Fees and Charges Regulations, 2019, forms the bedrock for performance-linked incentives for RLDCs and NLDC. It mandates the computation of KPI s annually and submission to the Commission for approval.

> “(5) The RLDCs or NLDC, as the case may be, shall be allowed to recover incentive of 15% of Annual LDC Charges for aggregate performance level of 90%. The incentive shall increase by 1% on pro-rata basis for every 5% increase of performance level above 90%. The incentive shall be capped as per DPE Office Memorandum No. W-02/0028/2017-DPE (WC)-GL-XIII/17, dated 3.8.2017: Provided that incentive shall be reduced by 1% on pro-rata basis for every 3% decrease in performance level below 90%.”

The CERC's detailed procedure for KPI calculation, established on May 20, 2022, outlines the methodology and parameters for performance evaluation. This procedure assigns weightage across categories like stakeholder satisfaction, financial prudence, learning & growth, and internal processes, totaling 1000 marks.

CERC's Analysis and Approval

Upon reviewing the submissions and supporting documents, including undertakings from the heads of NLDC and RLDCs , MoU scores, and various performance reports and weblinks, the Commission found the submitted KPI marks to be in order.

The performance of each Load Despatch Centre and the corresponding approved incentive percentages are:

NLDC/ RLDC	Performance Achieved (%)	% of Annual LDC Charges as Incentive
NLDC	89.415	14.805
NRLDC	96.249	16.250
WRLDC	92.857	15.571
SRLDC	97.768	16.554
ERLDC	90.134	15.027
NERLDC	95.091	16.018

Implications and Future Outlook

The CERC has allowed NLDC and all RLDCs to recover these incentives from users for the financial year 2022-23, subject to true-up at the end of the control period. This decision underscores the regulatory focus on performance and efficiency within the power sector, incentivizing Load Despatch Centres to maintain and enhance their operational excellence. The approved incentives are expected to further motivate these critical entities in ensuring grid stability and efficient power management across India.

This order sets a precedent for future performance evaluations and incentive mechanisms within the regulatory framework, highlighting the importance of achieving and surpassing KPI targets for entities operating in the power transmission and despatch sector.