CERC debates on tariff structure for thermal power plants

In view of decreasing PLF of the thermal generating stations, the Central Electricity Regulatory Commission (CERC) is relooking the current two-part tariff structure and seeking feed back from stakeholders to replace it with a three-part tariff structure.

This in turn could encourage signing of long term PPAs by the state owned power distribution companies as it may decrease some of the stress in the power sector for units unable to complete the project or remain idle due to lack of long term power demand agreements, an utility company official told PTI.

Due to low demand, coal based power plants are running at a PLF of around 60 per cent. PLF in 2017-18 was 59.68 down from 77.5 per cent in 2009-10, while the government forecasts the same to go lower to 56.50 by FY22?.

Consequently, the states have not been coming forward for long term power purchase to avoid fixed cost liability and they have been resorting to short term power purchase to meet their demand, the CERC said in its latest tariff consultation paper.

The two-part tariff system structure is suitable when the demand for power ensures utilization of capacity or around the target availability, CERC has said in its new 2019-2024 tariff consultation paper.

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