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The Punjab State Electricity Regulatory Commission has introduced new draft amendments to its regulations governing the determination of tariffs for generation, transmission, wheeling, and retail supply. The updated regulations, effective from their publication date, include several significant changes.
One notable change is the updated definition of “Auxiliary Energy Consumption,” now encompassing equipment related to Emission Control Systems. A new definition for Emission Control Systems has also been introduced, specifying that these systems are required for coal or lignite-based thermal power plants to comply with revised emission standards.
The revised regulations also modify how additional capitalization due to changes in law, including those related to Emission Control Systems, is handled. The return on equity for these changes is capped at 14%.
Depreciation rules for Emission Control Systems have been adjusted as well. For systems installed after a plant’s commercial operation, depreciation will be calculated annually using a straight-line method. If the system is installed after the plant’s useful life has ended, depreciation will be spread over ten years or as mutually agreed upon with the beneficiaries.
Interest on loan capital will now be based on a benchmark rate plus an additional percentage. Certain clauses related to interest calculations have been removed or renumbered to streamline the process.
The regulations also update the rules for Operations & Maintenance expenses, particularly concerning emission control in thermal stations. The cap for these expenses is set at 2% of the admitted capital expenditure, with adjustments for any income from by-products.
In terms of billing and payment, the regulations now require payments to be made within 30 days, down from the previous 60-day period. Additionally, the calculation of working capital components has been shortened from two months to 45 days.
Finally, the performance parameters definition now includes specific consumption of oil, water, or reagents. Interest calculations on working capital have also been adjusted to 45 days, with some previous terms removed.
These amendments are designed to improve regulatory clarity and address current industry needs effectively. |
