CERC to set new criteria of power generation, transmission

Electricity tariffs may change as power sector regulator Central Electricity Regulatory Commission (CERC) will soon announce new parameters determining the cost of generation and transmission for thermal power projects.      

Now the power industry, as a thumb rule, considers Rs 4 crore per Mw for determining the cost of projects and tariffs are determined based on this and transmission expenses.      

According to a senior Central Electricity Regulatory Commission (CERC) official, this has no legal sanction and the new proposed norms would be technology- and fuel-sensitive and would be decided keeping in mind the unit size.      

The official, however, did not say whether the Rs 4 crore per Mw criterion would change.      

The capital cost of a thermal power project is the basis for calculating tariffs.      

"Till now, we had to approve whatever funding the companies ask because tariff is determined on that basis but now we would set new capital cost benchmarks for thermal power generation and transmission projects and we will keep in mind past historical data," a senior CERC official said. 

The CERC is talking to some consultants to draft these norms. The parameters would be set by a consortium of consultants including KPMG.      

Meanwhile, the CERC has also said that it is in favour of fixed capital cost for renewable energy projects such as small hydro, biomass, solar and wind units as well, and a draft regulation for the same is likely to be notified in a week.