The Central Electricity Regulatory Commission (CERC) has set the national average power purchase cost (APPC) at ₹3.48 (~$0.0542)/kWh, barring a few states for open access. According to CERC the APPC will apply during the financial year (FY) 2017-18 and until further orders for deviation settlement with respect to open access.

Regional entities selling open access (large power consumers of 1 MW or more purchasing power in the open market) wind or solar power under REC framework and captive power projects that do not have a power purchase agreement will use APPC for settlement.

The new national APPC is ₹0.08 (~$0.0013) higher than the national APPC for FY 2016-17, which was ₹3.40 (~$0.0529)/kWh. The updated APPC will not apply to the states of Tamil Nadu, Tripura, Delhi, Jharkhand, Gujarat, Maharashtra, Assam, Kerala, and Rajasthan.

The total power purchase cost considered when computing the APPC excluded both transmission charges and the cost of generation or procurement from renewable energy sources. The national APPC for FY 2017-18 was determined by computing the average APPC for all states and union territories (UTs) weighted by the volume of the conventional power purchased by the respective state/UT.

In cases where multiple utilities operate in a single state, the state’s average power purchase cost was weighted by the total power for respective utilities to compute APPC for the entire state.

In its order, the CERC stated that since the state electricity regulatory commissions (SERCs) for a few states/UTs have not issued APPC orders or tariff orders in past financial years, the new APPC will not apply to those states.

Meanwhile, the APPC determined in FY 2014-15 will apply in Tamil Nadu and Tripura and the APPC determined in the FY 2015-16 tariff order will apply in Delhi and Jharkhand. The CERC added that the APPC applicable for Rajasthan distribution companies will be ₹3.4266 (~$0.0534)/kWh, in step with a new tariff order issued by the Rajasthan Electricity Regulatory Commission (RERC).

In the states of Gujarat, Maharashtra, Assam, and Kerala, the tariff order for FY 2016-17 will be applied as the APPC.

The CERC invited comments from stakeholders on the national APPC determination but received none.