Little respite for NTPC as Delhi HC refuses stay on CERC tariff norms

Mar 20 2014, 09:05 IST
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SummaryCourt lists matter for further hearing on May 19, asks regulator to consider NTPC’s views.

payment of generation incentives to developers — from plant availability factor (PAF) to plant load factor (PLF). While PAF means declared capacity availability for generation, PLF stands for actual electricity generation by a plant. While NTPC has control over PAF, PLF could vary, depending on factors like fuel availability and offtake of electricity by discoms.

At a time when coal shortage remains a serious issue, linking incentive payment to PLF could make things difficult for NTPC. The recovery of fixed charges payable to generators, though, will remain linked to PAF. Further, the regulator has also tightened station heat rate and auxiliary power consumption norms.

Under the new rules, discoms will reimburse generators whatever tax may be paid by them on the applicable 16% RoE, instead of the normative corporation tax.

As the power sector is enjoying a tax holiday, it pays the minimum alternate tax of 20% instead of 33% corporate tax. But the generators get reimbursement from discoms at 33%. In the new regime, NTPC and other generators would be deprived of this tax arbitrage.

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