The Central Electricity Regulatory Commission (CERC) has proposed to set the national average power purchase cost (APPC) at ₹3.53/kWh for the financial year (FY) 2018-19.

The proposal of national APPC is open for comments by stakeholders up to May 2, 2018.

The CERC has proposed that this APPC will be applicable during FY 2018-19 for the purpose of deviation settlement in respect of the open access and captive wind and solar generators fulfilling the requirement of regional entities.

For FY 2017-18, the CERC had set ₹3.48 (~$0.0542)/kWh as the national APPC for open access. The proposed APPC is ₹0.05/kWh more than the APPC decided for the last fiscal.

APPC at the national level for FY 2018-19 has been determined by computing the average of APPC of all states and union territories (UTs), weighted by volume of conventional power purchased by the respective states and UTs.

In case of multiple utilities operating in a state, the average of power purchase cost weighted by total power of the respective utilities was computed by CERC to derive the APPC for the entire state.

The total cost of power purchase considered for the computation of APPC excludes the cost of generation or procurement from renewable energy sources and transmission charges.

Exclusion of cost of generation or procurement from renewable sources is in line with the objective of determining APPC, which is to determine the average cost of power from only the conventional sources of electricity.

In its order, the CERC also stated that since the state electricity regulatory commissions (SERCs) for a few states and union territories have not issued tariff orders in past financial years, the new APPC will not apply to those states. For example, For the state of Tripura, tariff order of 2014-15 has been considered while for West Bengal, the order of 2016-17 will apply.