The Central Electricity Regulatory Commission (CERC) has issued a staff paper on review of composite index used for computing the escalation rate for imported coal for bid evaluation and payment.
For computing the escalation rate for imported coal, a composite index for imported coal was developed in 2006, which was modified in 2013, and the same is being used since April 1, 2014. It has been more than a decade now since the last revision and there have been developments in the international coal markets, country-wise steam coal imports in India, and the availability of more credible and reliable coal price indices which represent steam coal imports in India. Based on these changes, CERC has proposed a methodology containing three major changes, i.e. incorporation of two new price indices in place of the existing coal price index used for Australian coal; incorporation of a new price index in place of the existing coal price index used for South African coal; and changes in the weight assignments based on the trends in steam coal imports in India. Further, CERC has proposed to review the composite index every three years or as and when the need arises, whichever is earlier. The CERC has sought comments and suggestions on the staff paper by June 30, 2023.
Click here to read the staff paper