The Central Electricity Regulatory Commission (CERC) has approved supplementary tariff for the installation of emission control systems (ECS), including a Flue Gas Desulphurisation (FGD) system, at Damodar Valley Corporation’s (DVC) 500 MW Bokaro-A Thermal Power Station.
The Commission, comprising Chairperson Jishnu Barua and Members Ramesh Babu V., Harish Dudani and Ravinder Singh Dhillon, passed the order while determining supplementary tariff for the period 2024–2029.
DVC had claimed capital expenditure of approximately ₹472.92 crore for the emission control systems, which became operational on June 22, 2024. The Commission approved supplementary tariff of approximately ₹67.23 crore on a pro-rata basis for 2024–25 and annualised supplementary tariff of approximately ₹89.43 crore for 2025–26, ₹89.27 crore for 2026–27, ₹87.26 crore for 2027–28 and ₹84.33 crore for 2028–29.
An important issue arose from the Environment (Protection) Amendment Rules, 2025, notified on July 11, 2025, under which sulphur dioxide emission standards ceased to apply to Category C thermal power plants, subject to compliance with the prescribed stack-height criteria. Punjab State Power Corporation Limited (PSPCL) consequently sought to restrain recovery of FGD-related charges and sought a refund of amounts already recovered towards such costs, with interest.
DVC argued that the investment had already crystallised when the FGD contracts were awarded and the emission control systems were operationalised under the environmental norms then in force. The Commission accepted this reasoning, observing that the expenditure could not be rendered infructuous or disallowed merely because of a subsequent regulatory relaxation.
The Commission noted that the FGD installation contract had been awarded on July 15, 2019, and the emission control systems became operational on June 22, 2024, both before the 2025 amendment. It further observed that the Ministry of Power’s Office Memorandum dated December 19, 2025, contemplated that stakeholders could mutually decide the future course of action for Category C thermal power plants and did not invalidate investments already made and operationalised.
Accordingly, the Commission held that supplementary tariff towards installation of the ECS/FGD system would remain payable by the respondent beneficiaries until the stakeholders reach a mutually agreed decision under the Ministry of Power’s memorandum or until further directions are issued by the appropriate authority. It granted the parties liberty to approach the Commission in the event of a dispute.
The Commission also allowed DVC to recover the petition filing fee from the beneficiaries on a pro-rata basis in accordance with the applicable tariff regulations.
