SEZs may get nod for retail power rates from SERCs

There is a good news for developers of special economic zones (SEZs) and those setting up power projects within the SEZs. Power regulators have arrived at a consensus that an individual state electricity regulatory commission (SERC) could consider permitting retail rates in the case of new SEZs on the principle of rates for incumbent licensee being taken as ceiling.

Forum of Regulators (FOR), a representative body of all SERCs chaired by Central Electricity Regulatory Commission (CERC) chairman also agreed that the SERCs may also consider laying down simplified reporting and scrutiny requirements for the SEZ licensees. This was considered necessary in view of the large number of SEZs approaching the SERCs in some states for rate approval. The issue would further come up discussion at FOR’s meeting slated for February 14 in Mumbai.

The power regulators’ move is crucial, as the Board of Approval has till date approved 581 SEZs across the country. The issue of power distribution rates for SEZ developers was taken up even by the commerce ministry with the Centre for seeking clarity. CERC chairman Pramod Deo told Business Standard, “We will discuss the issue at length at its proposed meeting.”

The commerce ministry has stepped in and suggested the guidelines in this regard be put in place by the SERCs. The ministry wanted that the proposed guidelines basically cover general terms and conditions of licence for the SEZ as deemed licensee and the ceiling rate and the exemptions from the requirement of rate filing for the SEZ licensees through suitable provisions in the rate regulations.