Karnataka HC tells authorities told not to enforce Revised (CERC) DSM Regulations against petitioners

Bengaluru: The Karnataka high court has passed an interim order directing the authorities not to enforce the Revised Central Electricity Regulatory Commission (CERC) (Deviation Settlement Mechanism and Related Matters) Regulations, 2024 against the petitioners.

Justice K S Hemalekha passed the interim order in a petition filed by National Solar Energy Federation of India and others, including wind energy producers. The court also ordered notice to the union government, Central Electricity Regulatory Commission, Grid Controller of India, the Meteorological department and others while adjourning the hearing to June 10.

The petitioners challenged Regulations 6 (2) (b) and 8 (4) of the 2024 Regulations. Under these Rules (DSM regime), stakeholders are required to forecast and declare day and week-ahead renewable power generation for each pooling station or each generating station. The new rules, came into effect from April 1, 2026, and seeks to alter the formula for computation of deviation and imposes stringent deviation bands insofar as shortfall or excess electricity supply and contains enhanced penalties.

“Pending consideration of the writ petition and that the petitioners are willing to continue under the earlier DSM regime and comply with the existing deviation norms, the operation of Regulations 6 (2) (b) and 8 (4) of the DSM Regulations, 2024 shall not be enforced against the petitioners to the extent of revised formula and enhanced penalties, till the next date of hearing. The petitioners shall continue under the earlier DSM regime, deviation up to 15% shall be governed in terms of the earlier framework and the petitioners shall pay deviation charges,” Justice K S Hemalekha said in the interim order. The court further stated that the authorities are at liberty to seek vacating or modification of the interim order.

The counsel for the petitioners submitted that the DSM framework regulates deviation from scheduled generation and imposes financial consequences to maintain grid discipline. The renewable energy generation (solar/wind) is inherently weather dependent and uncontrollable, unlike conventional sources, it was contended.

The petitioners submitted that the 2024 Regulations have been notified without compliance of mandatory prior publication under Section 178 (3) of the Electricity Act, 2003. The draft notification did not contain the revised deviation formula as ultimately notified, and therefore stakeholders were denied a meaningful opportunity to object to the substantive change, the petitioners stated.