NTPC presentation to CERC on new tariff rules within a week

As per the regulations notified by the electricity regulator, there will be changes with regard to tax and calculation of incentives for thermal power plants

State-owned NTPC will make a presentation within a week to electricity regulator CERC to consider its case against the new 5-year tariff regulations.

The Delhi High Court yesterday asked Central Electricity Regulatory Commission to consider and decide on the NTPC representation against the regulations that would take effect from April 1.

As per the regulations notified by CERC, there will be changes with regard to tax and calculation of incentives for thermal power plants.

The regulations also require thermal plants to calculate incentives based on plant load factor (PLF) rather than plant availability factor (PAF). The PAF is the declared capacity or the total generation capacity of the plant, whereas PLF is the actual generation which is based on the demand.

According to sources, with the new guidelines coming into place from April 1, the company may find it difficult to find lenders in the future as the new regulations may impact the company's financials. They said it will make its presentation to CERC within a week.

NTPC has said that it will suffer a loss of around Rs 7,000 crore if regulations come into effect. The company has also said that it should be incentivised on total generation capacity of its plants.

CERC is expected to submit the report to the Delhi High Court in a month's time.

Query sent to NTPC CMD Arup Roy Choudhury remained unanswered.

"Recent CERC order will have 8-10% downward impact on NTPC's profitability and therefore it is a cause of concern for NTPC," Debasish Mishra, Senior Director (Consulting) Deloitte said.