Research Report

Power Tariffs in India 2014_enincon

Power Distribution Tariff in India 2014

E-version/Single User Price: $ 599.00

FY 2013-14 has witnessed the implementation of “Tariff Regulation 2014-19” and its implication on the power tariff. But in FY 2014-15 it’s the coal block de-allocation and its expected re-allocation in March which will have the highest impact on tariff. Electricity tariff from some of the power plants has been determined through tariff-based bidding, while some plants have agreements that provide for fuel cost pass-through to the consumer and for these plants the Government is planning to induce a cap on power prices as per the block. Hence it will be interesting to witness the take of regulatory commission approving the tariff revision petition and thereby the impact analysis of the regulations on power tariffs.

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With CERC Draft Regulations for the control period 2014-19 already rolled in and public hearing conducted the final regulations are expected to be in light by March, 2014. The draft regulations if found implemented, without any modification/relaxation can lower the power tariffs existing in the country. The calculations and estimations reveal that the proposed regulations may bring down the burden of tariff by a quantum of 5-6% on the consumers. This would mean a marginal relief to consumers but it would constrain the revenues of both Private and Government generation companies in India, viz. NTPC, NHPC, Tata Power and Lanco etc.

The negative impact would be observed for the power producers as the draft regulations would see generation based incentives linked to plant load factor (PLF) instead of currently existing plant availability factor (PAF). This if implemented would find the revenues of all the power producers sink, especially the central power producers which may vary in the range 7-15%. Also, in addition the draft regulations do not allow grossing up of taxes. Companies such as NTPC are allowed tax benefit on assets under Section 80 IA and, therefore, the effective tax rate is lower than the corporate tax rate. Henceforth, NTPC may have to shell out INR. 600-800 crore as an additional tax burden. In this milieu, the impact analysis of the regulations on power tariffs coupled with the factual data on the most recent power tariff’s applicable on a countrywide basis was an imperative.

By meticulously examining the draft regulations and deeply analysing the possible impacts on all the stakeholders, ENINCON attempts to blend the factual power tariff data and present a dossier which would be first of its kind and would enable clients with reliable insights and better understanding of the power tariff dynamics in the country. The key queries which find answer in this report are: What is likely rationale behind tariff calculations followed in India for 2014-19? In this dossier ENINCON delves deep to and most exhaustively examines the draft regulations and its key impacts on the stake holders with a comparison of current and the upcoming regulation. Through this report, ENINCON attempts to unveil the pressure on the power generation companies with incentives linked to PLF instead of PAF and in the current fuel scarcity prevalent in the country.  Also, what would be the cost of power supply and cost of procurement vis-à-vis from power distribution utility’s perspective is mapped in detail?

Queries like these and many more find their solutions in the virtue of this report which is to explore how the Indian electricity generation sector would respond to the new tariff norms. The report also analyses current power tariffs prevalent in all the states of India with utility wise status. The report provides highly reliable datasets and excellent insights on power tariffs and is a must buy for all allied stakeholders in the business value chain of power generation to sale.


USPs associated with the report are as follows:

  • First hand sector knowledge and inputs
  • Primary research inputs from F2F interviews with domain experts
  • Experts insights and market reviews taken into consideration
  • Validated data and analysis
  • Opportunity mapping and market sizing
  • Germinates from minds that think fresh to evolve path finding guide for all stake holders through quality information and analysis

Key Highlights:

  • Analysis of current tariffs prevailing to all states of India
  • Utility wise status of tariffs
  • In Depth analysis of CERC’s Draft Regulation