NATIONAL TARIFF POLICY

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-RAHUL SHARMA

5/25/12

NATIONAL TARIFF POLICY

On Jan 6, 2006 Central Govt notified

National Tariff Policy (NTP) for the power sector in compliance with EA 2003 and in continuation with the National Electricity Policy.
It Basically deals with various

parameters w.r.t fixation of tariffs, providing adequate ROI to power generators, suppliers and consumers who are buying the same power.
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Objectives of Policy
Ensure availability of electricity to

consumers at reasonable and competitive rates.

Ensure financial viability of the sector

and attract investment.

Promote transparency, consistency

and predictability in regulatory approaches across jurisdictions and minimize perceptions of regulatory risks.
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Guidelines
Provides uniform guidelines to SERCs

for fixation of tariffs for their respective entities.

NTP deals with general approach to

tariffs wherein it talks about all issues ROI,equity norms to be abided by project developers.
Discusses norms related to

depreciation & cost of debt.

Lays down operating norms 5/25/12 to

 Talks about promotion about

renewable energy & captive energy.

Policy states that MYT(Multi year

Tariffs) to be adopted to calculate any tariff after April 1,2006.

On generation, it talks about setting

different capacities for meeting peaking demand.

Deals with issues of calculations of

cross-subsidy charges.

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TWO Main Issues Dealt:

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Impact & Issues related to NTP

Distribution licensee should procure

power through competitive bidding but it DOESNOT apply to expansion of existing projects.
Returns of private players through

competitive bidding will not be regulated.

Policy states that any cash resources

available to company from its share premium account can be used to fund 5/25/12

 Deals with Issues pertaining to

operations being below normal for many years , i.e -the initial starting point in determining revenue requirement should be recognized at relaxed levels not desired levels.
Policy doesnt talk about eliminating

cross subsidy charges instead limiting them.

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THANK YOU!!

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