CERC Notifies Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (First Amendment) Regulations, 2025

The Central Electricity Regulatory Commission (CERC) has issued the First Amendment to the Terms and Conditions of Tariff Regulations, 2025.

Key highlights of the amendment are as follows:

1. Definition of Bank Rate: The term Bank Rate has been introduced to mean the one-year Marginal Cost of Funds based Lending Rate (MCLR) as published by the State Bank of India (SBI) from time to time, plus 100 basis points, or any replacement thereof. This definition replaces the earlier expression “at the simple interest rate of 1-year SBI MCLR plus 100 basis points” wherever applicable in the regulations.

   
   

2. Regulation 36 – Self-Insurance Premium:

   • Generating companies must transfer self-insurance premiums to a separate fund, which shall be used exclusively for meeting insurance claims.

   • The utilization details must be submitted to the Commission as and when directed.

   • The maximum permissible self-insurance premium has been increased from 0.09% to 0.12% of the relevant asset value.

     
     

3. Regulation 37 – Interim Coal Price Adjustment:

   • Generating companies may seek approval for an interim input coal price in their tariff petition.

   • CERC may allow up to 90% of the claimed input price post the first hearing, with final adjustments made after determination of the approved price.

     
     

4. Regulation 50 – Coal Price Adjustments:

   • Coal price adjustment will now be based on the "price of alternative coal available" instead of the "notified price of Coal India Limited", allowing for a more market-aligned pricing approach.

     
     

5. Regulation 51 – Overburden Removal:

   • The amendment provides a detailed methodology for cost adjustments relating to shortfall or excess overburden removal during coal mining operations.

     
     

6. Regulation 70 – Compensation for Low Availability:

   • A new sub-clause (G) has been introduced to provide compensation to generating stations for operational inefficiencies arising from operation below the normative Plant Availability Factor (PAF).

     
     

These amendments are aimed at improving regulatory clarity, enhancing cost recovery mechanisms, and aligning tariff regulations with prevailing market conditions.