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Power stocks gain on CERC's new tariff regulations

BS Reporter  |  New Delhi 

On a day when most sectors closed in the red and the Sensex closed 2.45 per cent lower, the sectoral index for power was up 1.4 per cent on the back of the higher return on equity (RoE) allowed by the power regulator to power generation and transmission companies.

The Power index gained 1.4% at 1,804. NTCP surged 4.3% to Rs 186. Reliance Infrastructure rallied over 3% to Rs 552, and Tata Power gained 1% at Rs 770.

In its new tariff regulation applicable from 2009-2014, the Central Electricity Regulatory Commission (CERC) raised the RoE from 14 per cent to 15.5 per cent keeping in view the need of attracting investment in the current market conditions.

It also allowed an additional 0.5 per cent RoE to those projects commissioned within the given timelines.

These central regulations also form the guiding principles for state regulators.

First Published: Tue, January 20 2009. 16:03 IST