Power regulator to float approach paper on 2019-24 multi-year tariffs this month

Central Electricity Regulatory Commission (CERC) will this month float its ‘approach paper’ on multi-year tariffs for power stations and transmission lines, according to a senior official with the power sector regulator.

The paper will deal with the all-important 2019-24 tariffs of central power stations. The tariffs will be effective April 2019 and the regulator will come out with the new tariff regime before the end of the next financial year, as is usually the case.

The CERC tariffs deal with cost-plus projects that are usually given on nomination basis to state-owned power generators like NTPC, SJVN, NHPC, NLC India, Damodar Valley Corporation and North Eastern Electric Power Corporation.

The approach paper will deal with the issues that the regulator thinks need to be deliberated upon in the context of the current scenario in the power sector. These include return on equity to be offered to power sector companies, capacity addition targets and increasing role of renewable power in the energy scenario in the country.

Also read: Power distribution firms can’t charge compensatory tariff: SC

The regulator is keen to kick-start the work on the new tariff regime soon before the current Chairperson Gireesh B Pradhan retires at the end of the year.

The current tariff regime guarantees a 15.5 percent post-tax return on equity to thermal and hydro- electric power plants. Around 20 percent return is guaranteed to solar capacities.

At the end of June, the country had an installed power capacity of 330,273 MW. Of this, 220,575 MW was thermal, 44614 MW hydro (more than 25 MW units), 32,508 MW wind and 13,114 MW solar.

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