CERC finds POWERGRID subsidiary prima facie eligible for Khavda transmission licence under S.14/15 Electricity Act; condones filing delay - 2025-06-23

CERC Finds POWERGRID SPV Prima Facie Eligible for Key Khavda Transmission Licence, Paves Way for Public Consultation

New Delhi, June 23, 2025 – The Central Electricity Regulatory Commission (CERC), in a significant procedural order, has found POWERGRID KPS 1 and 2 Augmentation Transmission Limited prima facie eligible for a transmission licence for a critical infrastructure project in the Khavda region. The project aims to augment power transformation capacity to support India 's renewable energy goals.

The bench, comprising Chairperson Jishnu Barua and Members Ramesh Babu V. and Ravinder Singh Dhillon, condoned a 10-day delay in the filing of the application and directed that a public notice be issued to invite suggestions or objections before a final decision is made.

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Background of the Case

The petition was filed by POWERGRID KPS 1 and 2 Augmentation Transmission Limited, a wholly-owned subsidiary of the state-run Power Grid Corporation of India Limited (PGCIL). The company sought a transmission licence under Sections 14 and 15 of the Electricity Act, 2003, for the project titled "Augmentation of transformation capacity at KPS1 (GIS) and KPS2 (GIS) (Phase-V Part B1 and Part B2 scheme)."

This project involves installing high-capacity transformers at two key substations (KPS1 and KPS2) to evacuate power from upcoming renewable energy projects, including those by Adani Green Energy and Gujarat Industries Power Company Ltd. The project was awarded through a Tariff Based Competitive Bidding (TBCB) process managed by REC Power Development and Consultancy Limited (RECPDCL).

Arguments and Key Submissions

The petitioner, represented by Shri Rohit Jain , detailed its compliance with all regulatory pre-requisites. Key submissions included:

Successful Bid: PGCIL emerged as the successful bidder in a competitive e-reverse auction, quoting the lowest levelized transmission charges of ₹698.58 million per annum. This was lower than the competing bid from Adani Energy Solutions Limited.

Regulatory Compliance: Following its selection, PGCIL acquired the petitioner Special Purpose Vehicle (SPV), furnished a Contract Performance Guarantee of ₹15 crores, and executed the Transmission Service Agreement (TSA) with the Central Transmission Utility of India Limited (CTUIL).

Filing Delay: The petitioner explained that a 10-day delay in filing the licence application was due to a technical issue with the e-filing portal and requested the Commission to condone it.

Project Necessity: CTUIL, in its submission, supported the grant of the licence. It highlighted that the augmentation is essential to maintain grid stability (N-1 compliance) and facilitate the immediate injection of over 1400 MW of renewable power from the Khavda region, even before the larger evacuation systems are fully commissioned.

The 29 listed respondents, including major power distribution companies and generators, did not file any reply to the petition despite being served notice.

Commission's Observations and Legal Application

The CERC meticulously reviewed the case against the backdrop of the Electricity Act, 2003, and its 2024 Transmission Licence Regulations.

"The Petitioner has been incorporated under the Companies Act 2013... The Project under consideration has been identified for development under competitive bidding by a competent authority, and the selection of the Project developer has been certified to have been made in accordance with the Guidelines for competitive bidding," the Commission noted, affirming the petitioner's eligibility under Regulation 4 of the Licence Regulations.

On the procedural delay, the Commission took a pragmatic view:

"The Petitioner has submitted that there has been a delay of 10 days in the filing of the instant Petition due to the non-reflection of the filing fees of the Petition on the e-portal... Since the Petitioner could not file the Petition due to procedural lapse, we condone the said delay."

The Commission also took on record the change in the petitioner's name from ‘Khavda V-B1B2 Power Transmission Limited’ to ‘POWERGRID KPS 1 and 2 Augmentation Transmission Limited’, effective May 14, 2025.

Final Decision and Next Steps

After considering all materials and submissions, the CERC concluded that the petitioner meets the preliminary requirements for the licence. The final order stated:

"Considering the material on record, we are prima facie of the view that the Petitioner satisfies the conditions for the grant of inter-State transmission licence under Section 15 of the Act... We, therefore, direct that a public notice under clause (a) of sub-section (5) of Section 15 of the Act be published to invite suggestions or objections to the grant of a transmission licence aforesaid."

The Commission has scheduled the next hearing for July 15, 2025, after the period for public objections closes on July 11, 2025. This order moves a vital piece of India 's power transmission infrastructure one step closer to reality, underscoring the regulatory framework's role in facilitating large-scale energy projects.