Date: 2018-06-28Category: Extra OrdinaryState: Union GovernmentCountry: India
Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by Distribution Licensees, Annual Escalation Rates for Domestic Coal.
Executive Summary:
The Central Electricity Regulatory Commission (CERC) notifies annual escalation rates for domestic coal, effective June 1, 2018. This notification follows guidelines from the Ministry of Power and adopts a new Wholesale Price Index (WPI) series for non-coking coal (G7-G14) from April 2012. The new rates will be used for correcting payment index base energy charges and for payment purposes.
Key Points / Main Content:
Adoption of New WPI Series:
* CERC adopts the new WPI series (Base 2011-12) for non-coking coal (G7-G14) from April 2012, published by the Department of Industrial Policy and Promotion (DIPP).
* This new series is considered more reflective of actual prices in the power sector compared to the older series.
Application of Escalation Rates:
* Escalation rates based on the new series from April 2013 to March 2017 are used to correct the payment index base energy charges.
* Escalation rates based on the new series from April 2017 are used for payment purposes.
* Escalation rates notified provisionally in April and October 2017 are considered final.
Annual Escalation Rates:
* The notification includes a table of annual escalation rates for domestic coal based on the new WPI series (G7-G14) and rates notified by CERC for payment purposes.
Impact Analysis:
Distribution Licensees:
* Impact: Affected by changes in tariff determination for power procurement and payment calculations for domestic coal.
* Action Required: Implement the new WPI series and escalation rates for payments and energy charge adjustments as specified in the notification.
Power Generators:
* Impact: Impacted through the value of payments they receive for energy produced using domestic coal.
* Action Required: To note that rates from April and October 2017 are to be considered as final and to adjust invoicing accordingly.
Key Entities Referenced
Central Electricity Regulatory Commission: Regulatory body that notifies annual escalation rates for domestic coal.
Ministry of Power: Government ministry that issued guidelines for tariff determination by bidding process.
Department of Industrial Policy Promotion: Department that publishes the Wholesale Price Index (WPI) for Noncoking coal.
New Delhi: Location where the notification was issued and the location of Government of India Press.
Wholesale Price Index: Index used for computing the escalation rate for domestic coal.
Office of the Economic Advisor: Office within DIPP, Ministry of Commerce and Industry, that publishes the new series of WPI.
Domestic Coal: The primary commodity for which escalation rates are being notified.
EcoA2018CERC: Notification number associated with the Central Electricity Regulatory Commission.
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PUBLISHED BY AUTHORITY
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3631 GI/20182 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC. 4]
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[foKkiu III@4@vlk-@117@18&19]
CENTRAL ELECTRICITY REGULATORY COMMISSION
NOTIFICATION
New Delhi, the 1st June, 2018
No. Eco-A/2018-CERC.—In pursuance of Clause 5.6 (vi) of Ministry of Power Notification dated
19.1.2005 on “Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by
Distribution Licensees”, as amended from time to time, the Central Electricity Regulatory Commission
notifies various annual escalation rates (including the escalation rate for domestic coal) for the purpose of
payment.
2. As per the methodology developed in July 2009, CERC has been using Wholesale Price Index (WPI) for
Non-coking coal published by Department of Industrial Policy & Promotion (DIPP) for computing the
escalation rate for domestic coal. On 12.5.2017, the Office of the Economic Advisor, DIPP, Ministry of
Commerce & Industry published the new series of WPI (Base 2011-12) from April 2012. The escalation rate
for domestic coal for the purpose of payment based on the new series of WPI for Non-coking coal (G7-G14)
is more reflective of the prices of grades of Non-coking coal used by the power sector as compared to the old
series of WPI for Non-coking coal (which represents the price of all grades of Non-coking coal i.e. G1-G17).¹Hkkx IIIµ[k.M 4º Hkkjr dk jkti=k % vlk/kj.k 3
3. Therefore, consequent to the availability of the new series of WPI for Non-coking coal (G7-G14), the
Commission has decided to adopt the new series from April 2012 for notification of the escalation rates for
domestic coal as under:
(i) The escalation rates (based on the new series) applicable from April 2013 to March 2017 shall be
used only for correcting the payment index (base energy charges) and not for the purpose of
payment.
(ii) The escalation rates (based on the new series) applicable from April 2017 shall be used for
payment. Accordingly, the escalation rates for domestic coal notified (as provisional) in April
2017 and October 2017 shall be considered as final.
4. The Commission hereby notifies the annual escalation rates for domestic coal for the purpose of payment
and the annual escalation rates for domestic coal based on the new series of WPI for Non-coking coal (G7-
G14) for correcting the payment index (base energy charges) as per the following table.
Annual Escalation Rates for Domestic Coal
Notification Annual Escalation Rates for Domestic Coal Annual Escalation Rates for
notified by CERC for the purpose of payment Domestic Coal (based on the New
Series of WPI for Non-coking
Escalation Rates Escalation Rates Coal G7-G14) for Correcting the
based on WPI for based on WPI for Payment Index (base energy
Non-coking Coal G1- Non-coking Coal G7- charges)
G17 G14
(1) (2) (3) (4)
Apr 2013 4.10% - 8.31%
Oct 2013 0.71% - 1.82%
Apr 2014 3.55% - 9.77%
Oct 2014 1.24% - 8.27%
Apr 2015 0.00% - 0.00%
Oct 2015 0.00% - 0.00%
Apr 2016 0.00% - 0.00%
Oct 2016 0.51% - 2.79%
Apr 2017 - 13.78%* -
Oct 2017 - 0.00%* -
Note: Annual Escalation Rate for Domestic Coal notified (as provisional) in April 2017 vide Notification
No. Eco-1/2017-CERC dated May 30, 2017 and in October 2017 vide Notification No. Eco-2/2017-
CERC, dated October 10, 2017 (*) are final.
SANOJ KUMAR JHA, Secy.
[ADVT.-III/4/Exty./117/18-19]
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.