Delhi HC refuses stay on CERC tariff norms

Delhi HC refuses stay on CERC tariff normsState-run NTPC got little respite with regard to its grievance over the Central Electricity Regulatory Commission's (CERC) new tariff norms as the Delhi High Court on Wednesday refused to grant a stay on the new norms sought by the power giant.

However, the HC directed the CERC to consider any representations made by NTPC against its new five-year tariff regulations, which are set to come into effect on 1st of April this year.

In its petition, the power producer had sought that the measure of coal's Gross Calorific Value (GCV) should not be on the "as fired" basis; instead, it should be on the "as received" basis.

NTPC's counsel accused the CERC of acting in an arbitrary manner while fixing tariff rules for the next five years, and argued that the new rules would benefit discoms.

The counsel told the court, "I am challenging the validity of the regulations as they are ultra vires the Electricity Act. CERC has acted in an arbitrary manner while fixing tariff norms for the next five years. These regulations give benefits to discoms."

The power sector is currently enjoying a tax holiday, which allows it to pay the minimum alternate tax of 20 per cent instead of 33 per cent corporate tax. But the power generators receive reimbursement from discoms at a rate of 33 per cent. Under the new norms, power generators like NTPC would be deprived of this tax arbitrage.

The matter is now listed for further hearing on May 19, 2014.