The Central Electricity Regulatory Commission (CERC) has notified the annual escalation rates for power procurement payments for the period October 1, 2025, to March 31, 2026. These rates are used for payments under Power Purchase Agreements (PPAs) that follow the tariff-based competitive bidding guidelines issued by the Ministry of Power.
Domestic Fuel Escalation
The CERC has determined the following positive escalation rates for domestic fuels:
- Domestic Coal: 1.46 percent
- Domestic Gas: 6.86 percent
Imported Fuel and Related Costs
The rates for imported fuel components show a significant de-escalation (negative rates) across the board:
| Component | Annual Escalation Rate for Payment (percent) |
| Imported Coal | -27.58 percent |
| Transportation of Imported Coal | -22.01 percent |
| Inland Handling of Imported Coal | -0.90 percent |
| Imported Gas | -24.81 percent |
| Transportation of Imported Gas | -22.01 percent |
| Inland Handling of Imported Gas | -0.90 percent |
The negative rates suggest a notable decrease in the cost of imported fuels during this period, which would reduce the escalable portion of the energy charge for plants using imported resources.
Inland Transportation Charges
Inland Transportation Charges for Coal: All charges for inland transportation of coal, regardless of distance (up to and beyond 2000 Km), have been set at a 0.00 percent escalation rate.
Inland Transportation Charges for Gas: These charges show positive escalation rates that vary by distance zone:
- Zone 1 (Up to 300 Km): 10.20 percent
- Zone 2 (300-1200 Km): 2.73 percent
- Zone 3 (Above 1200 Km): 13.53 percent
Inflation/Indexed Charges
Inflation rates applied to indexed components have also been set as negative figures:
- Inflation rate for indexed capacity charge component: -0.90 percent
- Inflation rate for indexed energy charge component (in cases of captive fuel source): -0.97 percent
These notified rates are mandatory for use in determining payment to power generators as per the terms of the relevant PPAs, ensuring that the tariffs remain reflective of the changes in underlying costs as stipulated by the bidding guidelines.