CERC Seeks Input on Transition to Monthly Coal Escalation Rates

The Central Electricity Regulatory Commission (CERC) is seeking feedback from stakeholders on how to best transition from a system of bi-annual adjustments to monthly adjustments for the cost of imported coal used in power generation.

In June 2022, the CERC established a new methodology for calculating the escalation rate for imported coal used for power plant payments. This new system determines the adjustment on a monthly basis, replacing the previous system of bi-annual adjustments.

The Challenge

While the new system reflects more frequent price fluctuations, it raises the question of how to best manage the transition from the old system to the new one. The CERC acknowledges this and is seeking input on various options for a smooth switchover.

Seeking Public Input

A Staff Paper outlining the current method and proposing different transition options has been published on the CERC website. Stakeholders, including power companies and industry experts, are encouraged to submit comments and suggestions by June 24, 2024.

Transparency and Participation

The CERC emphasizes that the Staff Paper reflects the views of its staff and does not represent official Commission policy. This open approach allows for public participation in shaping the final transition plan.

A smooth transition to monthly adjustments is crucial for ensuring fair pricing for imported coal and maintaining the stability of the Indian power sector.