CERC rejects NTPC's petition seeking revision in tariff norms

Electricity regulator CERC today rejected state-run NTPC's petition seeking changes in the tariff norms from 2014-19.
The Central Electricity Regulatory Commission in its order said: "The 2014 tariff regulations provide for reimbursement of the actual cost of generation of power by the companies, including NTPC, in addition to reasonable return on equity of 15.50 per cent per annum."
The draft guidelines of CERC proposed that the incentives given to the thermal power projects should be linked to the PLF (plant load factor) and not PAF (plant availability factor).
NTPC said that it will suffer a loss of around Rs 7,000 crore if regulations come into effect. The company's generation incentives should be linked to the actual power produced instead of supply, it added.

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.
CERC in its order dated June 30, 2014, said that the risks associated with the business of electricity generation have been taken care of in the 2014 tariff regulations.
The regulator added that the credit rating of a company is based on various factors including sound financials, risk management etc and cannot be linked to rationalisation of norms in an exercise undertaken by participation from all the stakeholders.
There is no merit in the representation of NTPC to revisit provisions of 2014 tariff regulations and therefore the representation is dismissed, CERC said in an order.