The Uttarakhand Electricity Regulatory Commission (UERC) has issued draft regulations for the Deviation Settlement Mechanism (DSM) and related matters, aimed at strengthening grid discipline, operational security and financial accountability across Uttarakhand’s electricity system. The proposed Uttarakhand Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2026 have been framed under Section 181 of the Electricity Act, 2003.
The regulations will apply to all entities connected to the state grid, as well as intra-state electricity traders. They establish a commercial mechanism for settling differences between scheduled electricity transactions and the actual injection or drawal of power by grid-connected entities. Deviations will be calculated for each 15-minute time block based on schedules finalized by the State Load Despatch Centre (SLDC).
The framework provides separate deviation charge mechanisms for different categories of grid participants, including general sellers, run-of-river hydro generating stations, municipal solid waste plants, wind and solar generators, standalone energy storage systems (ESS), and buyers. Charges for certain entities will be linked to system frequency bands, while renewable energy generators and buyers will be subject to specified deviation limits and rate structures.
A key feature of the draft regulations is the formal recognition of Qualified Coordinating Agencies (QCAs) for wind and solar projects connected to pooling stations. QCAs will act as the primary coordinating entities for forecasting and scheduling. Their responsibilities will include submitting day-ahead forecasts, coordinating schedule revisions, managing Special Energy Meters (SEM), and facilitating commercial settlements. To qualify, a QCA must be an incorporated Indian company, have at least one year of forecasting experience and maintain a minimum net worth of Rs. 1.50 crore.
The SLDC will manage the financial settlement process through a dedicated Deviation and Ancillary Service Pool Account. Deviation statements will be issued weekly, with entities required to deposit applicable charges within seven days. Delayed payments beyond nine days will attract simple interest at 0.04% per day. Entities that defaulted on payments during the previous financial year will also be required to maintain a Letter of Credit equivalent to 110% of their average weekly liability.
Any surplus remaining in the pool account at the end of a month will be transferred to a newly created State Power Systems Development Fund.
The draft regulations also address gaming, including deliberate mis-declaration of capacity for financial benefit. UERC will have the authority to investigate suspected gaming, initiate proceedings and disallow deviation-related earnings obtained through deceptive practices.
Once finalized, the 2026 regulations will repeal Uttarakhand’s existing 2017 DSM framework and establish an updated mechanism aligned with the state’s changing power sector and grid management requirements.
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