CERC launches 5-year dual TDP

The Central Electricity Regulatory Commission ( CERC) has worked out a 5-year dual Tariff Determination Policy ( TDP) (2009- 2014) for central, state and private power utilities which includes bifurcation of tariff for generating stations and transmission systems.

Under the plan the tariff in respect of a generating station may be determined stage-wise or unit-wise for the whole generating station. Tariff for the transmission system may be determined line-wise, substation-wise or system wise.

The TDP also has provisions of recovering excess tariff and refunding it to the beneficiaries or a long-term customer with a simple interest at the rate equal to the short term prime lending rate of State Bank of India ( SBI) on April 1 2014, the terminal year of the scheme.

On the contrary, if the tariff recovered is less that the tariff approved by the Commission then generating company or the transmission licensee shall recover it from the beneficiaries. The under-recovered amount will carry a simple interest which is also a short term PLR of SBI in the terminal year.

The amount under or over recovered shall be paid by the generating company or the transmission licensee in six equal installments starting within three months from the date of the tariff order.

Currently the tariffs are usually determined on a cumulative basis of generation and transmission. The new model is being developed to become more point specific and amenable to power utilities and also providing a ground level transparency for the consumers.

CERC recommends, for the purpose of determination of tariff, the capital cost of the project may be broken into stages and distinct units, transmission lines and sub-systems will be made part of the project.

This, however, is subject to conditionalities like non-availability of stage-wise, unit-wise, line-wise or substation-wise breakup of the capital cost of future projects. In case of on-going projects, the common facilities shall be apportioned on the basis of installed capacity of the units, line length and the number of days.

For multi-purpose hydro schemes, with irrigation, flood control and power components, the capital cost chargeable to the power component of the scheme only shall be considered for tariff determination.

The Commission shall also carry out truing up exercise during the terminal year of the tariff period ( 2013-14) with respect to the capital expenditure including additional capital expenditure, if any, incurred upto March 31 2013.

The additional expenditure will then be put under the scanner of the Commission, provided the generating company or the transmission licensee does not make an application before the regulatory body for a revised tariff before 2013-14.

Truing of the capital expenditure and additional capital expenditure incurred during 2013-14 shall be carried out in the tariff period commencing on April 1 2014, according to CERC.