CERC announces June 2023 Escalation Rates for Power Procurement by Distribution Licensees


In accordance with the Ministry of Power (MOP) notification on “Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by Distribution Licensees,” the Central Electricity Regulatory Commission (CERC) has released the monthly escalation rates for payment for the procurement of power by distribution licensees. This notification was issued on 21st July, 2023.

These rates are applicable for the month of June 2023 and align with the provisions outlined in various MOP communications and resolutions.

The CERC’s notification specifies the following escalation rates for the purpose of payment:

  1. Escalation rate for imported coal: (-) 9.10%
  2. Escalation rate for transportation of imported coal: (-) 5.41%
  3. Escalation rate for inland handling of imported coal: 0.21%

The escalation rates play a crucial role in determining the costs associated with power procurement from thermal power stations that operate on the Design, Build, Finance, Own, and Operate (DBFOO) basis and source fuel under the Model Bidding Documents.

These rates are also relevant for projects that receive coal allocation under B (I), B (III), and B (IV) categories of the SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India) Policy.

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