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India – Infrastructure Snapshots.

29 April, 2014

 


  • By way of a notification dated March 4, 2014, the GoI has constituted the Coal Regulatory Authority (‘CRO’). The functions of the CRO will, inter alia, be to advise on formulation of policies in the coal sector, including allotment or earmarking of coal blocks for any purpose and coal linkage, promotion of investment in coal industry, development of various mining technologies and beneficiation methods to improve mining and conservation of coal resources. The CRO has been appointed through an Executive order as the Coal Regulatory Authority Bill, 2013, is still pending before the Parliament.

 

  • On February 21, 2014, the Central Electricity Regulatory Commission (‘CERC’) notified the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 (‘2014 Tariff Regulations’). The 2014 Tariff Regulations come into force on April 1, 2014, and will remain in force for a period of five years from April 1, 2014, to March 31, 2019.

 

The 2014 Tariff Regulations will apply in all such cases where tariff for a generating station (or its unit) and a transmission system (or an element thereof) is required to be determined by the CERC under the Electricity Act, 2003.

 

The 2014 Tariff Regulations in particular seek to increase the operational efficiency of thermal generating stations, but with reduced incentives and by reducing the regulated returns. These regulations provide for a change in the basis of incentive payment for generation of electricity by thermal power plants. Under the earlier regulations, the basis of incentive payments was “Plant Availability Factor” which, under the 2014 Tariff Regulations, has been changed to “Plant Load Factor”. While “Plant Load Factor” depends on the availability of the power plant, it also depends on the buyers of electricity. The National Thermal Power Corporation has filed a writ petition before the Delhi High Court challenging the 2014 Tariff Regulations.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

 

AZB & Partners Energy & Project Finance Practice Profile in India

 

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