CERC to start work soon on framing new power tariff norms

CERC will be engaging consultant to have a better understanding about the current scenario

Electricity regulator CERC will soon start studying various sectoral aspects, including current trends and challenges, to decide on power tariff norms for the 2014-19 period.

 

The study, to frame 'Tariff Regulations for control period 2014-19', comes against the backdrop of multiple woes in the power sector especially rising dependence on imported coal which would push the electricity prices higher.

 

The Central Electricity Regulatory Commission (CERC), which is the sectoral regulator, would also be engaging consultant to have a better understanding about the current scenario.

 

 Factors including return on investment made by power producers, fuel issues, operational norms and various orders passed by authorities including CERC and Appellate Tribunal for Electricity (APTEL) would be taken into consideration.

 

"Considering the developments in the sector during the current tariff period, current and perceived challenges in the power sector and need for market development, it has been felt to give a fresh look into the basis and assumptions to be considered while framing the fresh terms and conditions of tariff for control period 2014-19," CERC has said.

 

In recent times, many power producers have faced hurdles related to increasing tariffs, especially in the case of projects utilising costlier imported coal.

 

Meanwhile, the consultant to be appointed by the CERC, would have the mandate to undertake comparative studies, collate information collected from the stakeholders and providing assistance in framing the new tariff regulations.

 

Among others, the consultant would carry out an analysis of "fuel stock being maintained by existing generating stations to take a view in regard to benchmarking of fuel stock for the purpose of working capital", according to a CERC document.

 

Also, an analysis of the debt market would be done for the purpose of deciding approach for return on investment taking into consideration domestic market.

 

CERC had issued regulations for electricity tariff for 2004-09 and 2009-14 periods.

 

At present, India has an installed power generation capacity of more than 2,25,793 MW. In the current Five-Year Plan (2012-17), about 80,000 MW capacity is expected to be added.