Companies & Sectors
CERC Compensatory tariff orders are a fine balancing act

The tariff orders to compensate for rise in the price of Indonesian coal provide relief to Tata Power and Mundra Power

CERC (Central Electricity Regulatory Commission) has notified the long awaited Compensatory Tariff orders on imported coal based Tata Power and Adani Mundra Power projects. The tariff orders have built a consensus among the stakeholders for providing relief to developers against a sharp rise in Indonesian coal prices (due to change in Indonesian regulations) through a mechanism of ‘Compensatory Tariff 1’, which is outside the purview of PPA (power purchase agreement).

 

‘Compensatory Tariff’ has been adjusted for

(a) net profit earned in mines;

(b) excess revenue earned by third party sale (if project achieves PAF>80%);

(c) 100 bps haircut on RoE (return on equity); and

(d) saving in fuel cost with lower GCV coal without sacrificing operational efficiency.

 

However, CARE Research believes that there is no meaningful impact of (b) and (d) conditions as plant has operated at 77% PAF YTDFY14 for Tata Power UMPP and usage of lower GCV coal decreases plant efficiency (SHR) and increases auxiliary consumption.

 

With this landmark judgement, CERC has managed to do a fine balancing act of preserving project viability for developers without disturbing sanctity of PPA and creating a mechanism for optimising DISCOM (distribution companies) power purchase costs, thereby reducing tariff shock to consumers, says CARE.

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COMMENTS

Anil Agashe

3 years ago

Fixed tariffs for 25 years is a big joke. Input costs have to be considered and a formula has to be worked out for price adjustments automatically. This order would seem to the first step in that direction.

REPLY

ABHA CHAWLA MOHANTY

In Reply to Anil Agashe 3 years ago

er..PERHAPS MACROECONOMICS EARNED LEVEL REUSED??......WITHOUT PREJUDICE.....MR ANIL AGASHE

Retail inflation as measured by the Consumer Price Index (CPI) stands at 8.1% for February 2014

Overall, there appears to be a slowdown in inflation across all the sectors except the ‘clothing, bedding and footwear’ industry

The downward trend in retail inflation commenced in December 2013 continues for the month of February 2014 as well, taming down the inflation concerns which loomed large over the economy during this fiscal. According to the data released, retail inflation, as measured by the Consumer Price Index (CPI), stands at 8.1% for February 2014 on a year-on-year basis edging lower than the 8.79% it recorded in January 2014. This is the third consecutive month of the downward trend in CPI inflation, which comes as good news following the upward trajectory inflation maintained in the first half of FY14.

 

The table below shows the movement of retail of inflation over the last three months:


 

Overall, there appears to be a slowdown in inflation across all the sectors except the ‘clothing, bedding and footwear’ industry, points out CARE Research.

 

According to CARE Research the continuous rate hikes by the RBI (Reserve Bank of India) and its resolve in taming down inflation finally seems to be reflecting in the retail inflation. Further, the expectation of a lower WPI (Wholesale Price Index) inflation for February is reiterated given the fall in CPI. Although inflation is on the desired path now, it is expected that RBI will maintain interest rates in the policy announcement in April 2014 to ensure that the decline in inflation continues before the monetary policy looks to promote growth.

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India welcomes dismissal of visa fraud charges against Devyani Khobragade

Devyani Khobragade won dismissal of the indictment against her for visa fraud, with a US judge ruling she had full diplomatic immunity

India on Thursday termed as 'good as far as it goes', the dismissal of visa fraud charges by a US court against senior diplomat Devyani Khobragade. Her arrest and strip-search had triggered a diplomatic row between the two countries.

 

A spokesperson in the Ministry of External Affairs said, "We have seen the judgement related to the indictment of 9th January. It is good as far as it goes".

 

He said the lawyers will meet to "examine it carefully before we are able to respond substantially and in more detail".

 

Khobragade, who was India's deputy consul-general in New York, was arrested on 12th December outside her children's school.

 

She has won dismissal of the indictment against her for visa fraud, with a US judge ruling she had full diplomatic immunity.

 

However, prosecutors are not barred from bringing new charges in future.

 

Reacting to the US court verdict, her father Uttam Khobragade said, "They tried to trap Devyani with a false complaint against her. I thank the Indian government and the Indians for their cooperation and help. She will go back to America with full diplomatic immunity".

 

US District Judge Shira Scheindlin said in her 14-page order that "it is undisputed" that Khobragade acquired full diplomatic immunity at 5:47 pm on 8th January after the US State Department approved her accreditation as a counselor to India's mission to the United Nations.

 

While the indictment was returned on 9th January, Khobragade had the immunity till she departed from the US for India on the evening of 9th January and so the prosecutors cannot proceed with the current indictment.

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COMMENTS

shadi katyal

3 years ago

The original case is not dismissed if one reads the judgment as Devyani was given full diplomatic immunity on January 8th and she departed on 9th thus her original position was technically not full diplomatic position and thus arrest.
She was asked to leave and thus one doubt if she can even return to USA or a visa will be issued.
MEA should tell the people about her marriage to a Non citizen and not fulfilling the clause of such marriage???Is the MEA so afraid of her Dalit background and playing such loose rules??
Did her refusal to return when asked by MEA in September not created this situation and her arrest???
Since we talking of MEA, what happened to Miss Gupta who gave some secrets as pillows talks to ISI lover??
Why has MEA not disclosed the officer who issued multiple Visa to Headley and if anyone was punished????

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