The Central Electricity Regulatory Commission (CERC) has invited comments from stakeholders and interested parties on the draft Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (First Amendment) Regulations, 2024. These draft amendment regulations were issued on August 2, 2024.
These draft regulations seek to amend the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2024 issued on March 15, 2024.
Key Points of the Draft Regulations
Introduction of Bank Rate
Bank Rate means the one year Marginal cost of lending rate as specified by the State Bank of India from time to time or any replacement thereof for the time being in force plus 100 basis points.
The draft regulations propose that where a generating company or the transmission licensee files an application for determination of tariff, the carrying cost shall be at the bank rate shall be allowed from the date of commercial operation of the project. At present, this carrying cost is at the simple interest rate of 1-year SBI MCLR plus 100 basis points.
Moreover, the draft regulations also propose that while determining the tariff, the difference between the determined tariff determined shall be recovered from or refunded to, the beneficiaries or the long term customers, as the case may be, with simple interest at the rate equal to the bank rate prevailing as on 1st April of the respective year of the tariff period. The current difference in tariff is calculated with simple interest at the rate equal to the 1 year SBI MCLR plus 100 basis points.
The draft regulations also propose to increase the maximum rate of the premium of self-insurance from 0.09% of the Gross Financial Assets (GFA) of the assets insured to 0.12% of the GFA of the assets insured.
Additionally, the draft regulations aim to amend the existing framework for terms and conditions associated with electricity tariffs.
Stakeholders and interested individuals are encouraged to submit written comments, suggestions, or objections on the draft regulations. Comments must be submitted in three hard copies and one soft copy, or by email to secy@cercind.gov.in and mmchaudhari@cercind.gov.in.
The deadline for submitting comments is September 6, 2024. A public hearing will be held at a later date to provide an opportunity for further discussion and feedback.
This initiative by the CERC aims to ensure transparency and public participation in shaping the regulatory framework for electricity tariffs. The final regulations will be implemented after considering the feedback received through this process.
