ERC Resolution No. 19, Series of 2026 – Rules on Off-Grid Transmission Wheeling and System Operation Charges
ERC approved rules establishing the methodology for setting off-grid transmission wheeling and system operation charges, providing a regulatory framework to ensure transparent, cost-reflective pricing and support reliable electricity service in off-grid areas.
6/22/20263 min read
SUMMARY
WHAT IT IS
This document sets the methodology and rules for determining and regulating transmission wheeling and system operation charges for off-grid areas, including asset valuation, rate-setting, billing, and turnover procedures.
Off-Grid Transmission Network Provider
System Operator
Metering Service Providers
Off-Grid Distribution Utilities
WHO IS AFFECTED
KEY DEADLINES
Annual true-up reports and adjustment applications must be submitted to ERC as specified.
Billing statements must be issued within ten (10) days after each billing period; corrections must be made within specified periods (up to 90 days).
TAKEAWAY
Regulated off-grid entities must use the prescribed methodologies for rate applications and comply with billing, reporting, and adjustment requirements.
Stakeholders should prepare for compliance with new billing, settlement, and asset turnover procedures upon effectivity.
KEY POINTS
Scope: Applies to regulated off-grid entities authorized to provide off-grid transmission services, including Small Grid Transmission Network Provider (SGTNP), Small Grid System Operator (SGSO), and Small Grid Metering Services Provider (SGMSP).
Covered Entities: Regulated Off-Grid Entities, including Transco (or its concessionaire), NPC-SPUG, and other entities designated as SGTNP, SGSO, or SGMSP in off-grid areas.
Requirements: Entities must compute Annual Revenue Requirement (ARR) using specified building blocks (Return on Capital, Return of Capital, OPEX, Taxes) and submit rate applications to the ERC for approval.
Thresholds: Methodology applies to small grids with more than one Distribution Utility (DU) or Generation Company (GenCo) utilizing high or medium voltage lines, as specified by DOE Circulars.
Deadlines:
Billing statements must be issued within 10 days after the billing period.
Corrections to billing statements must be made within 90 days of issuance or detection.
Billing disputes unresolved after 30 days may be referred to the ERC.
Compliance Obligations:
Annual true-up reports on under/over recovery must be submitted to the ERC.
Entities must implement structured charge translation for customer groups.
Entities must follow prescribed billing, settlement, and dispute resolution procedures.
Mechanisms Introduced/Amended:
Establishes methodologies for setting SGTNP, SGSO, and SGMSP charges, including formulas for rate computation.
Introduces asset valuation and roll-forward RAB methodology for off-grid assets.
Provides for charge adjustments due to interconnection, significant load/generation changes, or force majeure events.
Mandates asset turnover and compensation procedures upon interconnection with the Main Grid.
Sets out billing, payment, interest, and dispute resolution processes specific to off-grid transmission customers.
Other Provisions:
ERC may amend or grant exceptions to the rules as necessary.
VAT is charged separately on top of approved rates.
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ERC Resolution No. 19, Series of 2026
Detailed policy analysis
Operational and compliance implications
Stakeholder impact assessment
Risk flags and ambiguities
Suggested next actions
PREMIUM REGULATORY ANALYSIS
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Tags: Off-Grid Wheeling, System Operation Charges, Asset Valuation, Rate-Setting, Billing & Settlement, True-Up Mechanism