The Union power ministry has appointed Crisil Advisory Services for evaluating the Centre's tariff policy, which would lay out guidelines for the setting of tariff by power sector regulators.
The policy, a draft of which had been circulated internally in the ministry in April, led to differences among stakeholders in the power sector, especially the central public sector undertakings and the Central Electricity Regulatory Commission.
"Involving an external agency will ensure that the policy is seen as a balanced instrument. Moreover, it will incorporate a commercial angle," a power ministry official said. The policy is expected to be announced over the next couple of months.
According to the draft, the mobilisation of adequate resources for fresh investments to meet the needs of the sector has been termed as the determining factor for tariff fixation by regulators, officials said.
The draft has also noted that the regulatory commissions need to determine the operational norms and permissible costs while arriving at the tariff and there should be a uniform application of these for the same category of projects.
According to officials, it has been a concern that central utilities, especially NTPC, could derive some mileage out of the clause as NTPC's main argument against the CERC's tariff order has been that its capacity addition programme would be affected considerably if the order is implemented, an official said.
The corporation has also been objecting to different treatment of its plant under the ABT order vis-a-vis those coming up in the private sector with respect to incentives and disincentives linked to plant load factor (PLF), depreciation norms etc.
In the same vein, other stipulations in the draft policy could come to the aid of the CERC, which has justified its stipulations in the ABT order as a means of incentivising efficiency. For instance, the draft policy has said the tariff determination should incentivise efficiency gains and better performance through higher returns.
Among other things, the draft says the principles of common minimum Action plan for power (CMNPP) of raising minimum tariff to cover 50 per cent of the cost of supply in three years needs to be implemented at the earliest.
