This decision was taken in consultation with the Central Electricity Regulatory Commission (CERC) and the Central Electricity Authority (CEA). “The tariff based competitive bidding route is a preferred one if it is leading to lower tariffs which obviously is in the interests of consumers,” the CERC had said in its advisory. It may be added that NTPC had sought the exemption for public sector companies from
the competitive bidding. At present, Tariff Policy 2006 allows PSUs to adopt the cost plus tariff structure and this permission expire in January 2011 after which they have to compete with the private firms for supplying electricity.Expansion of public sector company’s thermal generation projects commissioned by the cut-off date will be exempt from the competitive bidding route. Upgrade and strengthening of existing transmission lines will also be exempt. DISCOMs setting up their own generation plants for supply of entire capacity to the consumers within their licensed jurisdiction will not be subject to competitive bidding.However, CERC has asked the Power Ministry to relax the deadline in exceptional cases such as for large size multi-purpose storage hydro projects in view of the complexities and construction risks involved.