TN’s APPC for FY14

Hon’ble TNERC has increased APPC for FY 2013-14 to Rs.3.11/kWh from Rs.2.54/kWh last year. This represents a formidable hike of 22.45%. The tariff is effective from 01.04.2013.

While the APPC has been revised to Rs 3.11, the tariff payable is restricted to 75% of the preferential tariff of the NCES category.

In the case of wind, this will translate to Rs 2.63 (75% of Rs 3.51), resulting in an effective increase of only 3.6%.

In our opinion, there are several potential issues with this:

1) At the outset, the definition used for calculating APPC in TN differs from the one used in other states and one suggested by CERC. By excluding power purchased from liquid fuel sources and short-term power, the APPC determined is lower.

2) The recent amendment by CERC in REC regulations says that a project receiving tariff ‘at APPC’ shall be eligible for RECs. The artificial restriction of 75% of preferential tariff may cause REC eligibility issues as it deviates from the CERC regulation.

Earlier, hon’ble KERC and APERC too revised their APPCs to Rs.3.07/kWh and Rs.2.69/kWh respectively.

The copy of the order can be assessed here.