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Power projects: CERC for competitive bidding

December 30, 2003 13:16 IST

The Central Electricity Regulatory Commission on Tuesday said it was pressing the Centre for introducing open competitive bidding for power projects and indicated that it may review norms for returns.

The regulator was pushing the Centre to introduce competitive bidding for even public sector projects including those promoted by National Thermal Power Corporation, CERC chairman A K Basu said, speaking at a seminar on the role of regulatory commissions, in New Delhi.

Basu said the move would enable the regulator to move away from the current practice of intrusive regulation as such competition would eliminate the need for the body to examine generation tariffs.

The regulator also said that it was looking at changing the norms for return on equity currently pegged at 16 per cent for power projects, saying that there had been demands to revise it in tune with the Reserve Bank of India rates.

While RBI rates had been revised downwards several times in the past few years, the RoE for power projects which is linked to RBI rates had not been touched, he said.

On power trading licenses, he said CERC would finalise guidelines by middle of January and had allowed a few players to undertake such activity at their own risk under the old legislation.

On the issue of establishment of power exchange, Basu said the concept was in its early days and was three to four years away from fructification.

He said the exchange was a pooling system where power would be made available by suppliers for consumers to draw.

The regulator is currently examining best practices and may appoint a consultant to study various models.

Basu also set aside demands from various quarters seeking reintroduction of norms from previous electricity legislation which were repealed following the enactment of Electricity Bill 2003.

Basu said it was not possible to have a uniform approach towards tariff determination as conditions would vary from state to state therefore it was essential for the forum of regulators to sit together to look at these issues.


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