CERC’s latest connectivity order is about more than legacy LoAs; it offers a window into how the CERC is thinking about scarce transmission infrastructure.
On 10 July 2026, the Central Electricity Regulatory Commission (CERC) issued a suo motu order introducing a one-time, optional mechanism for renewable energy projects that had obtained ISTS connectivity against Letters of Award (LoAs) but had not secured Power Purchase Agreements (PPAs) within twelve months.
The order applies to eligible legacy LoAs issued by SECI, NTPC, NHPC and SJVN between 1 January 2019 and 31 May 2025, offering affected entities three substantive choices viz retain connectivity under revised conditions, substitute the underlying LoA with another qualifying PPA, or surrender connectivity, with continuation under the existing GNA framework remaining available for those who do not opt into the mechanism.
But the more interesting question is why CERC considered such an intervention necessary in the first place.
The answer lies not in the operative clauses, but in the Commission’s diagnosis of the problem.
The Problem Didn’t Begin With This Order
At one level, the order addresses a specific legacy issue. Connectivity granted against REIA-issued LoAs remained blocked because many of those LoAs never matured into PPAs. The assumptions underpinning the original framework that LoAs would naturally progress to PPAs, project execution and commercial operation, did not hold in every case. Connectivity remained reserved while the underlying projects stalled.
The Commission’s own numbers illustrate the scale of the issue. It identifies approximately 22.05 GW of connectivity associated with LoAs that had not culminated in PPAs. Around 6.35 GW of this also involves transmission-planning constraints, and the Commission itself notes that the quantum ultimately released is likely to be lower because some PPAs may still materialise.
Those figures suggest that the order is solving three related problems simultaneously.
→ The first is stranded connectivity linked to legacy LoAs.
→ The second is project execution, where connectivity remained tied to projects that had not progressed despite the passage of time.
→ The third is transmission planning, because scarce bays and evacuation infrastructure remained unavailable for projects that were commercially ready to move forward.
Understanding these three problems makes the architecture of the order much easier to understand.
Connectivity Became More Than a Project Milestone
One phrase appears repeatedly in the Commission’s reasoning. Connectivity is described as a “scarce resource”. This language is critical because regulators rarely repeat an idea without purpose.
CERC is not merely explaining why legacy LoAs require special treatment. It is also explaining why transmission connectivity cannot be viewed solely from the perspective of an individual project. Once granted, connectivity influences transmission planning, the availability of bays, access for subsequent projects and, ultimately, the efficient utilisation of the interstate transmission system.
The Commission’s observations regarding the conduct of REIAs reinforce this point. It notes that legacy LoAs should not have continued indefinitely while later projects with signed PPAs remained unable to obtain connectivity. It also recognises that procurement patterns, tariffs, and market conditions changed over time, leaving many LoAs without corresponding PPAs.
The order, therefore, examines institutional outcomes rather than attributing responsibility to any single stakeholder.
Three Mechanisms Built Around One Idea
The three substantive options given by the CERC appear procedural. But collectively, they pursue a common objective.
Developers wishing to retain connectivity must now accept revised milestones for land acquisition, financial closure, and commercial operation, supported by a Performance Bank Guarantee.
Those choosing substitution may align connectivity with another qualifying PPA, subject to carefully defined limits that prevent repeated recycling of the same LoA.
Those surrendering connectivity enable CTUIL to first reallocate that capacity within the relevant substation cluster and, if it remains unutilised, auction it through a transparent process.
The mechanics differ, but the underlying principle remains consistent. Connectivity is expected to remain associated with demonstrable project progress, rather than indefinitely preserving historical eligibility.
CERC’s Unusual Regulatory Path
The legal architecture of the order is almost as interesting as its operational design.
Several stakeholders argued that such a mechanism should be introduced only through a formal amendment of the GNA Regulations.
CERC chose a different approach. Invoking its powers to relax the regulations and issue implementation directions, it introduced the framework as a one-time measure. At the same time, following stakeholder consultation, the Commission softened the draft framework by making participation optional rather than compulsory.
That balance is significant. It enabled the Commission to address an immediate operational issue, without fundamentally rewriting the regulatory framework governing connectivity.
The order, therefore, operates as a transitional solution for a defined class of legacy cases, rather than a general redesign of connectivity law.
The Signal That Extends Beyond Legacy LoAs
It would be premature to describe this order as a new philosophy of transmission regulation. It is, however, reasonable to read it as an indication of the factors that are receiving greater regulatory attention.
As India’s renewable energy programme expands, the value of transmission infrastructure increasingly depends on timely utilisation as much as timely creation. Generation capacity can continue to grow, but its benefits remain constrained if grid access is tied up in projects that are no longer progressing.
Read from that perspective, CERC’s latest order does more than resolve a legacy issue.
It reminds the sector that connectivity is not simply a project approval. It is a shared infrastructure resource, whose continued retention carries implications well beyond the project to which it was originally granted.
If connectivity is truly a scarce system resource, should regulators increasingly link it to demonstrable project progress?
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