Draft CERC Tariff Regulations 2024 Quiz

The proposed definition complicates IoL calculations by requiring different methods based on the loan portfolios for various assets within the same project.

Maintaining different tariff norms increases regulatory complexity, as it necessitates ongoing differentiation between projects for tariff determination.

April 1, 2024, marks the cutoff for applying new tariff norms to projects, affecting those whose investment approvals were granted before this date.

<p>RoE is computed in rupee terms on the equity base determined in accordance with Regulation 18 of the regulations.</p> Signup and view all the answers

<p>This recommendation aims to simplify the regulatory process and provide clarity in tariff determination for both new and existing projects.</p> Signup and view all the answers

<p>15.50%</p> Signup and view all the answers

<p>17.00%</p> Signup and view all the answers

<p>To maintain regulatory certainty and investor confidence in the power sector.</p> Signup and view all the answers

<p>15.00%</p> Signup and view all the answers

<p>It is insufficient to meet the growing investment needs and risks in Transmission.</p> Signup and view all the answers

<p>15.50%</p> Signup and view all the answers

<p>It is lower, with existing projects at 15.5% and new projects proposed at 15.0%.</p> Signup and view all the answers

<p>It helps avoid regulatory uncertainty and fosters growth and investment in renewable energy.</p> Signup and view all the answers

<p>To compensate for the investment-related risks undertaken by the utilities.</p> Signup and view all the answers

<p>It is determined based on the assessment of overall risk and the prevalent cost of capital.</p> Signup and view all the answers

<p>A delay reduces the effective Return on Equity, as no return is allowed during the construction period.</p> Signup and view all the answers

<p>It states that ROE should attract adequate investments comparable to other sectors.</p> Signup and view all the answers

<p>The effective rate of return decreases from 12.88% to 11.99%.</p> Signup and view all the answers

<p>Because the regulatory framework does not permit ROE compensation during this phase.</p> Signup and view all the answers

<p>Investors expect returns that are comparable to those from alternate investments with similar risks.</p> Signup and view all the answers

<p>Challenges such as Right of Way (RoW) issues and complex topography can lead to delays.</p> Signup and view all the answers

The process of combining project assets for calculation purposes.

Process for setting electricity prices.

Profitability of a project.

Cost of borrowing capital for the project.

This specifies the effective date for new tariff norms.

A system where utilities get a fair return on investment, considering the risk and opportunity cost of investments.

The potential return on the best alternative use of resources.

Additional return to compensate investors for taking more risk.

A delay in completing a power project due to uncontrollable factors like land acquisition issues or topography.

The actual rate of return on equity, factoring in project delays.

The discount rate that makes the net present value of all cash flows from a project zero.

The time it takes for a project to begin production or operation; usually for large-scale power projects.

The return on equity for existing thermal generating stations, transmission, and run-of-river hydro is 15.50%.

The return on equity for new thermal generating stations, transmission, and run-of-river hydro is 15.00%.

Existing and new storage and pumped hydro plants have a 16.50% and 17.00% RoE, respectively.

Consistent and predictable rules for investors, promoting confidence and long-term investment in the power sector.

The power sector requires substantial investment to handle growing demand and renewable energy integration.

A period where the power sector is shifting towards renewable energy sources and changing grid dynamics.

The proposed 15% RoE for new transmission projects is considered insufficient by POWERGRID.

POWERGRID urges the Commission to maintain the RoE at 15.5% for new transmission projects, citing investment risks.