Executive Summary:
This notification from the Central Electricity Regulatory Commission (CERC) announces the escalation rates for power procurement by distribution licensees. It addresses changes due to the implementation of the MARPOL regulation on Low Sulphur Fuel Oil (LSFO) and provides specific rates for transportation of imported coal and gas from January 1, 2020, to March 31, 2020. It also specifies an escalation rate for the changeover to LSFO effective January 1, 2020.
Key Points / Main Content:
Escalation Rates Notification:
* CERC notifies escalation rates as per Clause 5.6 vi of the Ministry of Power Notification regarding tariff determination for power procurement.
Transportation Escalation Rates (Jan 1, 2020 - Mar 31, 2020):
* Escalation rate for transportation of imported coal: 9.14
* Escalation rate for transportation of imported gas: 9.14
LSFO Changeover Rate:
* Escalation rate applicable for changeover to LSFO: 83.94 (effective January 1, 2020).
Impact Analysis:
Distribution Licensees:
* Impact: Affected by the notified escalation rates for transportation of imported coal and gas, as well as the rate for LSFO changeover, which impacts power procurement costs.
* Action Required: Incorporate the revised escalation rates into payment calculations for power purchase agreements.
Power Producers:
* Impact: Affected by the notified escalation rates for transportation of imported coal and gas as this may impact revenue from power generation.
* Action Required: Review and adjust financial models to account for the new escalation rates.
Key Entities Referenced
Ministry of Power: The Indian governmental ministry that issued the notification regarding tariff determination.
Central Electricity Regulatory Commission (CERC): The regulatory body that notifies the escalation rates for the purpose of payment related to power procurement.
New Delhi: The location where the notification was issued.
MARPOL Regulation: International convention for the Prevention of Pollution from Ships. Impacts escalation rates due to Low Sulphur Fuel Oil (LSFO) implementation.
Low Sulphur Fuel Oil (LSFO): Fuel oil with a low sulfur content, the implementation of MARPOL regulation impacts escalation rates for its use.
Suo Motu Petition No.11SM2019: A petition related to the methodology for computing the escalation rate for transportation of imported coal/gas due to MARPOL regulation.
Power Purchase Agreement: Agreements entered into for Procurement of Power by Distribution Licensees.
Sanoj Kumar Jha: Secretary of Central Electricity Regulatory Commission (CERC).
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. NO. D. L.-33004/99
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असाधारण
EXTRAORDINARY
भाग III—खण्ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
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CENTRAL ELECTRICITY REGULATORY COMMISSION
NOTIFICATION
New Delhi, the 22nd January, 2020
No. Eco-2/2019-CERC.—In pursuance of Clause 5.6 (vi) of Ministry of Power Notification on
“Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by Distribution
Licensees”, dated 19.01.2005, as amended from time to time, the Central Electricity Regulatory Commission
(CERC) notifies the following escalation rates for the purpose of payment.
2. Due to implementation of the MARPOL regulation on Low Sulphur Fuel Oil (LSFO) w.e.f. 1.1.2020,
the escalation rates for transportation of imported coal and gas applicable for the period from 1.10.2019 to
31.12.2019 were notified through notification No.Eco-2/2019-CERC dated 30.10.2019 as per the existing
methodology. In accordance with the “Methodology for computing the escalation rate for transportation of
imported coal/gas on account of implementation of MARPOL Regulation w.e.f.1.1.2020” issued vide order
dated 15th January, 2020 in Suo Motu Petition No.11/SM/2019, the escalation rates for transportation of
imported coal and gas applicable for the period from 1.1.2020 to 31.3.2020 are computed and are notified as
under:
Annual Escalation Rates applicable for the period from 01.01.2020 to 31.03.2020 for the purpose of
payment for Procurement of Power by Distribution Licensees as per the Power Purchase Agreement
entered into under the guidelines mentioned above:
S.No Description Annual Escalation
Rates for Payment
1 Escalation rate for transportation of imported coal -9.14%
2 Escalation rate for transportation of imported gas -9.14%
3. In addition, the escalation rate of 83.94% is applicable for changeover to LSFO w.e.f. 1.1.2020.
SANOJ KUMAR JHA, Secy.
[ADVT.-III/4/Exty./432/19]
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.