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CERC cannot set tariff norms: NTPC

Our Bureau

NEW DELHI, April 22

THE National Thermal Power Corporation (NTPC) has recently argued before the Central Electricity Regulatory Commission's (CERC) that the latter ``cannot lay down norms and tariff policies under the functions of determining and/or regulating tariffs.''

This was the main thrust of NTPC's case while it argued against CERC's order on Availability-based Tariff (ABT). The ABT order seeks to set in place a power tariff structure for Central and multi-State generating stations which induces grid discipline. T he order also pares NTPC's tariff, and, therefore its returns.

NTPC has argued in its review petition early this week that it has not challenged the concept of ABT or its application to the generating company. Rather, it has challenged the order since it ``deviates from the principles and norms fixed in the draft no tification finalised by the National Task Force in April 1999 and forwarded to the Government''.

The CERC order fixes the target availability for NTPC's generating stations at 80 per cent for 2000-2001 and 85 per cent from 2001, as against 70 per cent specified in the NTF order.

Quoting the ERC Act, 1998, NTPC has argued that the Commission's tariff setting role should be guided by the National Power Plans formulated by the Government. ``The norms and tariff policy are for the Central Government to formulate and the Commission's functions and jurisdiction is to aid and advise the Central Government is the formulation of tariff policy and on any other matter referred by the Central Government to the Central Commission.''

In this context, NTPC argued that the norms and parameters fixed under 43A(2) of the Electricity Supply Act, 1948 are part of the National Power Policy. Prior to the ERC Act, 1998, the Government drew its power to fix tariffs for Central sector generatin g station from Section 43A(2) of the ESA, 1948.

This section was, however, annulled under Section 51 of the ERC Act, 1998.