Central Electricity Regulatory Commission has issued an approach paper for studying and determining various terms and conditions for the tariff regulations for the control period of 2014 to 2019.
CERC will also appoint and engage a consultant to better understand the current scenario and to determine the trends in the Indian power sector.
The study, to frame 'Tariff Regulations for control period 2014-19', comes against the backdrop of multiple woes in the power sector especially rising dependence on imported coal which would push the electricity prices higher.
Factors including return on investment made by power producers, fuel issues, operational norms and various orders passed by authorities including CERC and Appellate Tribunal for Electricity (APTEL) would be taken into consideration.
As per the draft paper uploaded by CERC on its website...
"Considering the developments in the sector during the current tariff period, current and perceived challenges in the power sector and need for market development, it has been felt to give a fresh look into the basis and assumptions to be considered while framing the fresh terms and conditions of tariff for control period 2014-19,"
In recent times, many power producers have faced hurdles related to increasing tariffs, especially in the case of projects utilizing costlier imported coal.
Meanwhile, the consultant to be appointed by the CERC, would have the mandate to undertake comparative studies, collate information collected from the stakeholders and providing assistance in framing the new tariff regulations.
Among others, the consultant would carry out an analysis of "fuel stock being maintained by existing generating stations to take a view - in regard to benchmarking of fuel stock for the purpose of working capital", according to a CERC document.
Also, an analysis of the debt market would be done for the purpose of deciding approach for return on investment taking into consideration domestic market.
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Additional Reading...
- http://www.cercind.gov.in/2013/draft_reg/FO_AP_2013.pdf
- http://www.cercind.gov.in/2013/tender/TOR19.pdf
- http://economictimes.indiatimes.com/news/news-by-industry/energy/power/cerc-to-start-work-soon-on-framing-new-power-tariff-norms/articleshow/21308263.cms
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