Central Electricity Regulatory Commission (CERC)

The CERC or Central Electricity Regulatory Commission is a key regulator of the Indian power sector. As per sec-76 of the Electricity Act 2003, this statutory body functions with quasi-judicial status.

Latest Update:

  • According to The Hindu, Renewable Energy Certificates rose to 8.38 lakh units in March, nearly 79% more. This has led to the cancellation of the trading session that was scheduled for 31st March 2021.
  • Many Renewable Energy Associations filed petitions against the Central Electricity Regulatory Commission to revise the significant forbearance and floor prices of REC.

IAS aspirants can read in detail about the various Regulatory Bodies of India at the linked article.

Individuals preparing for UPSC 2022 should have thorough knowledge about the function of CERC and renewable energy regulatory boards.

What is the Function of CERC India?

Discussed below are essentially the pointers that explain the purpose of CERC and its functions to help UPSC and IAS exam aspirants prepare notes.

  • Individuals should know that CERC’s full form is Central Electricity Regulatory Commission, and it regulates India’s power sector. It was constituted on 24th July 1998 under the Ministry of Power’s Electricity Regulatory Commissions Act, 1998.
  • It promotes environmentally benign policies, maintains transparency in policies, and regulates electricity tariffs.
  • CERC primarily regulates tariffs of power generating companies that the Central Government owns. CERC also manages companies which follow interstate energy transmission and composite schemes for power generation.
  • The Central Government has also implemented the Electricity Regulatory Commission Act of 1998 that mandates forming the Central Electricity Regulation Commission. This commission will set the tariff of centre owned and controlled power generation companies.
  • This Electricity Regulatory Commission Act of 1998 has also come up with a provision to allow all the states to form their State Electricity Regulation Commission. These SERCs have the authority to determine tariffs.

Apart from understanding the basic functions of CERC, UPSC exam aspirants should keep a tab on all the latest news related to the said topic.

Why is CERC in the News?

The following reasons have brought CERC into the headlines –

  • According to The Hindu, the average spot power in India rose to ₹4.06 per unit in March 2021, compared to February at the Indian Energy Exchange. This increase can be attributed to the high demand for resources to stabilise economic activities and the temperature rise.
  • The CERC has recently ruled on a petition filed by the Solar Energy Corporation of India to compensate for the ‘Change in Law’. This demand was made following the increase in customs duty and safeguards duty on solar inverter import.
  • According to the Economic Times, Central Electricity Regulatory Commission (CERC) Chairperson PK Pujari, on 15th December 2021, said the share of the short-term electricity market will grow lucratively. This will reduce the growth of long-term power purchase agreements.
  • CERC or Central Electricity Regulatory Commission has also approved tariffs of ₹3 kWh for 810 MW and ₹2.99 kWh for 160 MW of solar blended wind power projects.
  • According to Business Line, the apex court has solved the dispute between the Central Electricity Regulatory Commission and Securities and Exchange Board of India (SEBI) by adding new contracts to India’s commodity and energy exchanges. New derivatives and forward contracts that exceed 11 days duration have been introduced.

Hopefully, these discussed points will help students answer the CERC UPSC questions easily. They can follow further updates on CERC actions to understand their function in detail.

Additionally, UPSC prelims aspirants can refer to study materials on CERC on education portals for revision.

Frequently Asked Questions on Central Electricity Regulatory Commission

Does CERC decide the electricity prices in India?

Yes, the Central Electricity Regulatory Commission determines tariff or electricity prices in India.

What are the provisions that control electricity tariff?

Electricity tariffs in India are based on provisions in Tariff Policy notified by the Government of India and Electricity Act 2003.

What is the primary difference between CERC and CEA?

CEA regulates all the existing gaps between power demand and supply in India while CERC maintains transparency in policies, rationalises electricity tariffs and promotes environmentally benign policies.

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