Tuesday, 11 March 2014

Terms & Conditions of Tariff determination (2014-2019)


Important Changes: 
  • Change in payment of Generation Incentives from PAF to PLF
  • Tightened station heat rate and auxiliary consumption norms.
  • Deprived tax arbitrage, i.e., reimbursements by discoms for the applicable tax paid (20%) rather than normative corporation tax (33%).
  • Reduction in threshold PLF for payment of generation incentives from 85% to 83%.
  • Relaxation in operational efficiency parameters for aging 200MW units and recovery of water charges.
  • Gross calorific value of coal in calculation of tariff is based on coal received rather than coal fired.

Benefits for End Consumers:
  • Discoms will have to pay less to the generating companies as incentives are based on PLF and might reduce the tariff for end users.
  • Efficiency in the utilization as result of tightened station heat rate.
Benefits for Discoms:
  • Reduced burden in paying Generation incentives.
  • Savings as a result of changes in tax arbitrage calculation.
Benefits for Generators:
  • Increase in incentives from reduced threshold PLF

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