NTPC, NLC, Gujarat Industrial Power Corporation etc were charged up in late trade on 20th January 2009, after Central Electricity Regulation Commission (CERC) issued revised Tariff Regulations for generation and transmission projects for 2009-14.
The new regulations have increased the base rate for allowing return on equity from 14% at present to 15.5%. CERC indicated that this was done keeping in view the need to attract investment in the current market conditions. Further, CERC indicated that to incentivise timely completion of projects in the present period of power shortages, an additional return on equity of 0.5% will be available for those projects which are commissioned within the given timelines. So, from 14% hitherto, the returns could touch 16% for power projects commissioned within given timelines! Also, the return on equity will now be pre tax for which the base rate of 15.5% would be grossed up by applicable tax rate for the company. This would incentivise investment promotion as the benefit of tax holiday will be now available to the project developer.
While CERC incentivises efficiency gains, it has also mooted periodical passing off the improvements to beneficiaries. Accordingly, the availability target for recovery of fixed cost for thermal power plants has been raised from 80% to 85%. Also, the incentive available to the generating companies will now be available on the basis of declared availability instead of plant load factor, considering the fact that the generators can only declare better availability and actual schedule is not within their control. Similarly, tariff for hydro power projects have been restructured to incentivise supply of peaking power.
Another big relief is that the provisional tariff has been done away with and the companies will get final tariff upfront. To make the tariff fixation more objective and simple, CERC will set up capital cost benchmarks for thermal power projects and transmission projects. CERC will separately bring out the tariff regulations for renewable energy based projects. It said that this exercise has already been started and is likely to be completed in next six months.
crackcrack
| Company Name | CMP |
|---|---|
| NTPC | 333.30 |
| Tata Power | 401.25 |
| Power Grid Corp | 315.75 |
| Adani Power | 498.45 |
| Torrent Power | 1476.80 |
| View more.. | |
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