Who fixes an electricity tariff: the central Commission for a central station, the State Commission for the State board
Background
Amid a power shortage, the Kerala State Electricity Regulatory Commission has allowed the Kerala State Electricity Board to keep buying 177 MW from two NTPC thermal plants, and the order shows where tariff-setting power actually sits.
The clearance covers 80 MW from Barh Stage-I and 97 MW from Barh Stage-II, and runs until 30 April 2029.
The tariffs of those NTPC stations are determined by the Central Electricity Regulatory Commission, not by the State Commission or by the State board.
Each such tariff has two components: a fixed charge and an energy charge.
For Barh Stage-II the average tariff works out to Rs 4.67 per unit, made up of a fixed charge of Rs 1.97 and an energy charge of Rs 2.89.
Because it cannot reset a central station's tariff itself, the State Commission directed the board to take an active part in the central Commission's tariff hearings and to work to bring the determined tariffs down.
The State Commission compared the rates with round-the-clock power discovered through the DEEP portal and the short-term market before clearing the purchase.
In plain words
CERC Central Electricity Regulatory Commission — The regulator that fixes the tariff of a central generating station such as an NTPC plant.
KSERC Kerala State Electricity Regulatory Commission — The State regulator that approves the State board's power purchases and retail tariffs.
Fixed charge Capacity component of a generation tariff — The part of the tariff payable for keeping capacity available, apart from the energy actually drawn.