The Karnataka Electricity Regulatory Commission (KERC) has proposed ₹2.95 (~$0.042)/kWh as the generic tariff for wind projects in the state.

Once the proposal is finalized, it will become the ceiling tariff for wind tenders in Karnataka for the financial year (FY) 2019-20.

This tariff will also apply in cases where payment towards banked energy are concerned. The generic tariff, if finalized, will be in force with effect from April 1, 2019, up to March 31, 2020. The KERC has invited suggestions and comments from stakeholders before finalizing the generic tariff. Comments and suggestions can be sent up to December 31, 2018.

The KERC has proposed a debt-equity ratio of 70:30 for tariff determination. Proposed project costs are ₹52.5 million (~$0.75 million)/MW at a CUF of 29 percent. The KERC has proposed interest rates of 11 percent on working capital and an interest rate of 10 percent on term loan.

The KERC has also proposed a loan tenure of 15 years. The project depreciation rate will be set at 4.67 percent of the capital cost for the first 15 years for recovery of debt, with remaining depreciation spread during the balance of the useful life of a project. The KERC has proposed a 14 percent return on equity (RoE) for wind projects.

While proposing the new generic tariff for wind, the KERC has taken into account the reduced operation and maintenance cost. The proposed generic tariff for wind is ₹0.50 (~$0.00716)/kWh less than the current generic tariff of ₹3.45 (~$0.04938)/kWh for wind for FY 2018-19. The proposed benchmark tariff is ₹0.09 (~$0.00129)/kWh more than the proposed generic tariff for wind in Tamil Nadu of ₹2.86 (~$0.04093)/kWh.

In 2017, the KERC had fixed ₹3.74 (~$0.05353)/kWh as the generic tariff for wind projects in Karnataka.