Quick Facts
What CERC is
CERC (Central Electricity Regulatory Commission) is the statutory regulator for the Indian electricity sector at the inter-state and central level. Established under the Electricity Regulatory Commissions Act 1998 and continued under the Electricity Act 2003, CERC sits at the apex of India’s electricity regulatory framework.
CERC operates as an independent quasi-judicial body. It is composed of a Chairperson and members appointed by the central government, with technical, legal, and management expertise. The Commission’s decisions are binding on the regulated entities and appealable to the Appellate Tribunal for Electricity (APTEL) and beyond to the Supreme Court.
For renewable energy, CERC’s role is significant in inter-state matters: tariff determination for SECI’s bulk solar procurements, regulation of inter-state transmission, oversight of the Renewable Energy Certificate (REC) mechanism, and approval of PPAs involving central agencies.
CERC’s jurisdiction
CERC has jurisdiction over:
Inter-state generation and transmission: Generating companies whose stations are inter-state in nature (such as Central Generation Stations and SECI-procured projects).
Central transmission utility: Power Grid Corporation of India and the inter-state transmission system.
Inter-state trading licensees: Power trading companies operating across state boundaries.
PPAs with inter-state buyers: SECI’s bulk procurements of solar and wind power involve CERC-approved PPA structures.
Regional load dispatch centres: The five regional load dispatch centres coordinate inter-state grid operations under CERC oversight.
REC mechanism: Tradable Renewable Energy Certificates, used for RPO compliance.
CERC does not regulate intra-state matters. State Electricity Regulatory Commissions (SERCs) handle electricity distribution, retail tariffs, intra-state generation, and intra-state transmission within their respective states.
CERC and solar tariffs
For utility-scale solar in India, the practical mechanism is competitive bidding through SECI’s reverse-auction tenders. CERC sets the regulatory framework that determines:
Benchmark capital costs and operating assumptions used in the calculation of tariffs (when administered) or as a reference for tender evaluation.
Tariff structure for SECI’s PPAs: the price (Rs per kWh) and the contract terms.
Approved tariffs after SECI’s discovery process: CERC reviews and approves the tariffs discovered in the auction.
The CERC tariff orders typically run to 100 to 300 pages with detailed cost analysis, return on equity calculations, and assumptions. They are public documents available on the CERC website.
CERC and the REC mechanism
Renewable Energy Certificates (RECs) are tradable instruments that decouple renewable energy generation from its consumption. A REC represents 1 MWh of renewable energy fed into the grid. Obligated entities (DISCOMs, captive consumers, open-access consumers) can buy RECs to meet their Renewable Purchase Obligation (RPO) without buying renewable power directly.
CERC regulates the REC mechanism comprehensively:
Floor price: The minimum price at which RECs trade. Set by CERC and revised periodically.
Forbearance price: The maximum cap on REC trading prices.
Eligible generators: Which renewable plants can issue RECs.
Trading platforms: Power Exchange of India Ltd (PXIL) and Indian Energy Exchange (IEX) host CERC-regulated REC trading sessions.
Validity and accounting: REC lifespan, banking rules, and accounting standards.
The REC mechanism has evolved over time. After a period of weak trading and price collapse in the late 2010s, CERC restructured the regulations in 2020 and the market has become more active.
Inter-state transmission and ISTS charges
For solar plants in one state selling power to consumers in another, the power must transit the inter-state transmission system (ISTS) operated by Power Grid Corporation. CERC sets the ISTS transmission charges and the methodology for losses, congestion, and ancillary services.
The Government of India waived ISTS charges for solar and wind generators commissioned by 30 June 2025 (and various extensions) as a policy push to expand interstate clean energy trade. CERC implements these policy decisions through specific orders.
For solar developers, ISTS charges (or their waiver) significantly affect project economics in inter-state trades. A waiver of Rs 0.50 to Rs 1.00 per kWh in ISTS charges can be the difference between a viable and unviable project.
CERC in the larger policy framework
CERC works in coordination with:
Ministry of Power: Policy direction at the central level.
Ministry of New and Renewable Energy (MNRE): Renewable energy policy and subsidy programmes.
Central Electricity Authority (CEA): Technical standards and national planning.
State Electricity Regulatory Commissions (SERCs): Parallel regulation at the state level.
National Load Dispatch Centre (NLDC) and Regional Load Dispatch Centres (RLDCs): Real-time grid operation under CERC oversight.
Power Grid Corporation of India: Central transmission utility.
The Forum of Regulators is a platform where CERC and SERCs harmonise approaches across the federal structure.
CERC’s role in solar disputes
CERC is the first-instance forum for disputes involving inter-state generators, transmission utilities, and central agencies. Common dispute categories:
Tariff determination disputes between developers and SECI.
PPA enforcement and curtailment claims.
REC mechanism disputes.
Transmission charge disputes.
Open-access transmission disputes.
CERC orders can be appealed to APTEL within 60 days. Further appeals on questions of law go to the Supreme Court.
For developers and consumers, the CERC dispute resolution mechanism provides a structured legal framework, though proceedings can take months to years.
Common references and accessing CERC
CERC official website: cercind.gov.in
Tariff orders: Published with case numbers and dates. The website has a searchable archive of orders going back to 1999.
Regulations: All CERC regulations (tariff regulations, sharing of inter-state transmission charges, REC regulations, open access regulations) are public.
Cause list: Daily list of cases scheduled for hearing.
Annual report: CERC publishes a comprehensive annual report describing the year’s activities.
For solar developers, lawyers, and lenders, regular monitoring of CERC orders is part of due diligence.
Common mistakes about CERC
Confusing CERC and SERC. CERC handles inter-state and central; SERCs handle intra-state.
Expecting CERC to set residential or commercial retail tariffs. It does not. Those come from SERCs.
Treating CERC orders as advisory. They are binding on the regulated parties and enforceable.
Missing the appeal window. APTEL appeals must be filed within 60 days of the CERC order.
Forgetting that CERC’s jurisdiction has limits. State-level matters belong to SERCs even if they involve solar.
Standards and references
CERC operates under the Electricity Act 2003, supplemented by CERC regulations issued from time to time. Key regulations include the CERC (Terms and Conditions of Tariff) Regulations, CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, CERC (Open Access in Inter-State Transmission) Regulations, and CERC (Terms and Conditions for Recognition and Issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations.
Related glossary terms
- SERC
- MNRE
- Feed-in Tariff
- Renewable Energy Certificate
- Open Access Solar
- Power Purchase Agreement
- ISTS Charges
- Renewable Purchase Obligation
Key takeaways
CERC (Central Electricity Regulatory Commission) is the statutory regulator for inter-state and central electricity matters in India. Established under the Electricity Act 2003, CERC sets tariffs for central generating stations, regulates inter-state transmission, oversees the REC mechanism, and approves inter-state PPAs (including those by SECI). CERC does not regulate intra-state retail tariffs, which fall under State Electricity Regulatory Commissions. For inter-state solar developers, IPPs, and consumers using open access across state boundaries, CERC orders define the regulatory framework.