Draft CERC (Terms and Conditions of Tariff) (First Amendment) Regulations, 2020

Apr 08, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Central Electricity Regulatory Commission (CERC) on April 01, 2020, has issued the draft Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (First Amendment) Regulations, 2020 to further amend the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019.

The followings are the amendments made in the CERC (Terms and Conditions of Tariff) Regulations, 2019:-

 In Regulation 3, the following new definitions are inserted, namely-

a) Regulation 3(5a) related to “Auxiliary energy consumption for emission control system”;

b) Regulation 3(15a) related to “Date of Operation”;

c) Regulation 3(20a) related to “emission control system”;

 The Regulation 3(48) related to “Plant Load Factor” has been substituted stating that the factor in relation to a thermal generating station or unit thereoffor a given period means the total sent out energy corresponding to scheduled generation during the period, expressed as a percentage of sent out energy corresponding to installed capacity in that period and shall be computed.

 In Regulation 9 related to “Application for determination of tariff”, a new proviso has been inserted, stating that the generating company shall file an application for determination of supplementary tariff for the emission control system installed in the coal or lignite based thermal generating station, not later than 60 days from the date of operation of such emission control system.

 The Regulation 15(2) related to “Supplementary Capacity Charges” has been newly inserted, stating that it shall be derived on the basis of the Annual Fixed Cost for emission control system (AFCe).

 The Regulation 18(6) has been new inserted related to “Debt-Equity Ratio”, stating that any expenditure incurred for the emission control system during the tariff period as may be admitted by the Commission as additional capital expenditure for determination of supplementary tariff, shall be serviced in the manner specified in clause 18(1) of this Regulation.

 In Regulation 23 related to “Initial Spares”, a new third proviso has been inserted, stating that where the emission control system is installed, the norms of initial spares specified in this regulation for coal or lignite based thermal generating station as the case may be, shall apply.

 In Regulation 29(5) related to “Additional Capitalization on account of Revised Emission Standards” has been inserted, stating that the un-discharged liability, if any, on account of emission control system shall be allowed as additional capitalization during the year it is discharged, subject to prudence check.

 In Regulation 30 related to “Return on Equity”, a new Clause 30(3) has been inserted, stating that the return on equity in respect of additional capitalization due to emission control system shall be computed at the weighted average rate of interest on actual loan portfolio of the generating station or in the absence of actual loan portfolio of the generating station, the weighted average rate of interest of the generating company as a whole shall be considered.

 In Regulation 32 related to “Interest on loan capital”, a new Clause 32(5a) has been inserted, stating that the rate of interest on loan for emission control system shall be the weighted average rate of interest of actual loan portfolio of the emission control system or in the absence of actual loan portfolio, the weighted average rate of interest of the generating company as a whole shall be considered.

 In Regulation 33 related to “Depreciation”, a new clause 33(9) has been inserted, stating that the depreciation of the emission control system shall be computed from its date of operation for the balance useful life or extended life of the generating station, as the case may be.

 In Regulation 34 related to “Interest on Working Capital”, a new clause 34(aa) has been inserted, stating that the working capital shall cover for emission control system of coal or lignite based thermal generating stations.

 A new Regulation 42A has been inserted which specifies that the computation and payment of supplementary capacity charge for coal or lignite based thermal generating stations.

 In Regulation 49 related to “Norms of operation for thermal generating station”, a new clause 49(F) has been inserted which specifies the normative consumption of specific reagent for various technologies for reduction of emission of sulphur dioxide shall be:

a) for Wet Limestone based Flue Gas De-sulphurisation (FGD) system

b) for Lime Spray Dryer or Semi-dry Flue Gas Desulphurisation (FGD) system

c) for Dry Sorbent Injection System (using sodium bicarbonate)

d) for CFBC Technology (furnace injection) based generating station

e) for Sea Water based Flue Gas Desulphurisation (FGD) system

f) for Selective Non Catalytic Reduction (SNCR) System

g) for Selective Catalytic Reduction (SCR) System

 A new form namely, Form 16A shall be inserted stating that “Details of Reagent for Computation of Supplementary Energy Charge Rate”.

These Regulations shall come into force from June 01, 2020, except amendment to Regulation 21, which shall come into force with effect from April 01, 2019.

The Commission invites comments or suggestions or objections, if any, from the stakeholders and interested persons on the draft Regulations. The comments or suggestions or objections, if any, may be sent to the Secretary, Central Electricity Regulatory Commission, 3rd & 4th Floor, Chanderlok Building, 36, Janpath, New Delhi -110 001 with 3 hard copies and soft copy on or before April 30, 2020. 

[Notification No. L-1/236/2018/CERC]


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