CERC norms to hit profitability of power utilities: CRISIL.

The Central Electricity Regulatory Commission's draft tariff guidelines for power utilities applicable for 2014-2019 have potential to reduce aggregate annual profits of CRISIL- rated utilities by Rs. 1,400 crore, or nearly 7 per cent of their profits in the last fiscal.

The rating agency CRISIL, however, believes that the guidelines will not impact the credit risk profiles of these utilities.

According to Pawan Agrawal, Senior Director, CRISIL Ratings, 'The guidelines retain the crucial feature of availability-based fixed-cost recovery, which covers debt servicing for these utilities. This will help them maintain stability in cash flows, and therefore, in credit quality.' This covers 13 CRISIL-rated power utilities which come under the purview of CERC.

HBL