CERC suggests steps to cool down electricity prices

New Delhi, Sep 2 (UNI) A 20 per cent higher tariff on inter-state sale of electricity in the short-term during peak hours is among the steps suggested by a discussion paper aimed at cooling down prices of electricity being sold.

Analysing the prevailing scenario in short-term trading arising from factors such as cost of power generation from typical power projects, the price trend in electricity trading and the current power supply position in the country, the staff paper circulated by the Central Electricity Regulatory Commission (CERC) suggests measures to bring down the price of electricity in short-term sales.

It proposes regulatory intervention under the provisions of the Electricity Act, in the form of price caps for inter-state sale of electricity in the short-term by the distribution licensees, trading licensees and the power from hydro electricity/ domestic coal/imported coal based power stations.

The proposed ceiling of tariff is 20 per cent higher for sale during peak hours compared to that during off-peak hours.

This includes price cap of Rs five per unit of electricity for inter-state sale.

Among the responses elicited to the discussion paper, titled ''Measures for restraining the prices of electricity in short-term sale/trading'', circulated was a price cap of Rs 6 for peak demand in the evening and ensuring impartial functioning of State Load Despatch Centres to increase power supply through 'Open Access'.

Flexible scheduling framework so that bi-lateral transactions can be modified at short notice in view of the demand pattern and strict monitoring of overdrawal by the states during low frequency so as to induce grid indiscipline and planned purchases of electricity were the other recommendations.

Stating that it fully recognises that there are no durable short-cut solutions and the states have to be accelerate addition of new generation capacity, the discussion paper also brings out various implications of price caps on the electricity market.

The staff paper is available of the web site of the Commission and the stakeholders have been invited to send their views by September 22, 2008.

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