CSERC (Terms and Conditions for determination of Multi-Year Tariff) Regulations, 2025 – EQ
Summary:
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**1. Scope of Application:**
The Regulations apply to the following entities operating in Chhattisgarh:
* State Transmission Utility
* Generating companies (supplying power to distribution licensees in the state under long-term agreements, except stations under central jurisdiction and certain renewable energy stations)
* All intra-state transmission licensees
* All distribution licensees
* State Load Despatch Centre
**2. Core Framework:**
* **Multi-Year Tariff (MYT):** Establishes a five-year Control Period from April 1, 2026, to March 31, 2030.
* **Aggregate Revenue Requirement (ARR):** Defines the costs permitted for recovery through tariffs, including Return on Equity, Interest, Depreciation, Operation & Maintenance (O&M) expenses, etc.
* **Truing-Up:** Establishes an annual mechanism to reconcile actual performance and costs against approved forecasts.
* **Controllable & Uncontrollable Factors:** Categorizes cost variations. Uncontrollable factors (e.g., fuel price changes, change in law, force majeure) are fully passed through to consumers. Gains/losses from controllable factors (e.g., efficiency performance) are shared between the entity and consumers/beneficiaries.
* **Capital Investment Plan (CIP):** Requires entities to submit and get approval for a capital expenditure plan covering the entire Control Period.
**3. Detailed Chapter-wise Provisions:**
* **Chapter 3 (Financial Principles):** Covers Debt-Equity Ratio (70:30 for new projects), calculation of Capital Cost, Depreciation rates, Return on Equity rates (15.5%-16.0%), Interest on Loan/Working Capital, normative O&M expense benchmarks.
* **Chapter 4 (Generation):** Details the components of Annual Fixed Cost for thermal and hydro stations, operational norms, and formulas for calculating Capacity Charge and Energy Charge.
* **Chapter 5 (Integrated Mine Input Price):** Specifically for generating companies with allocated captive/basket mines. Details the determination of the “input price” of coal/lignite for energy charge calculation, covering Run of Mine Cost, additional charges, annual extraction cost, etc.
* **Chapter 6 (Transmission):** Covers ARR composition for transmission licensees, calculation of Annual Transmission Charges, and treatment of transmission losses.
* **Chapter 7 (Distribution Wheeling Business):** Covers ARR composition for the wires business, determination of Wheeling Charges, and treatment of distribution losses.
* **Chapter 8 (Retail Supply Business):** Covers ARR composition for the supply business (including power purchase cost), sales forecasting, and the **Fuel and Power Purchase Adjustment Surcharge (FPPAS)** mechanism for automatic monthly pass-through of fuel and purchase cost variations to consumers.
* **Chapter 9 (SLDC Business):** Covers the composition of SLDC charges, allocation between System Operation Charges (SOC) and Market Operation Charges (MOC), and Registration Fee structures for various entities.
* **Chapter 10 (Battery Energy Storage Systems – BESS):** Establishes a dedicated tariff framework for BESS projects, including components, operational parameters (e.g., round-trip efficiency, availability), and calculation of Capacity Charge and incentives.
**4. Key Mechanisms:**
* **Fuel and Power Purchase Adjustment Surcharge (FPPAS):** Allows distribution licensees to automatically adjust consumer tariffs monthly based on actual variations in fuel and power purchase costs, subject to an annual true-up.
* **Late Payment Surcharge:** Specifies the calculation of late payment charges on overdue bills.
* **Subsidy Mechanism:** Mandates that State Government subsidies for any consumer category must be paid in advance to the distribution licensee, as per the Electricity Act.
* **Distinction between New & Existing Projects:** Different rules for capital cost, depreciation rates, and operational norms for projects achieving Commercial Operation Date before and on/after April 1, 2026.
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