The Central Electricity Regulatory Commission (CERC) has issued a notification regarding escalation rates for the payment of power procurement. This notification was issued on March 15, 2024.
The notification amends the “Guidelines for long term Procurement of Electricity from Thermal Power Stations set up on Design, Build, Finance, Own and Operate (DBFOO) basis and sourcing fuel as provided under Model Bidding Documents including allocation of coal under B (I), B(III) and B(IV) of SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India) Policy” dated 6.03.2019 and outlines the escalation rates applicable for February 2024.
According to the notification, the monthly escalation rates applicable for payment for the procurement of power by Distribution Licensees, as per the Power Purchase Agreement entered into under the mentioned Guidelines, are as follows:
- Escalation rate for imported coal: (-)1.98%
- Escalation rate for transportation of imported coal: (-)0.58%
- Escalation rate for inland handling of imported coal: 0.44%
These escalation rates are significant for ensuring transparent and fair payments in the power procurement process. They provide a framework for adjusting payments based on factors such as changes in coal prices and transportation costs, thereby maintaining stability and efficiency in the power sector.
The notification aims to facilitate smoother operations and financial transactions within the power procurement ecosystem, benefiting both suppliers and buyers in the electricity market.
