At least three states, including Maharashtra and Kerala, had not filed their tariff orders for FY22, up to April 28, 2021. The power ministry in a recent letter to all state governments has stressed on the importance of timely issuance of tariff orders.
In a joint communication dated May 3, 2021, addressed to state governments and state electricity regulatory commissions (SERC), the Union power ministry has observed that while some SERCs are issuing tariff orders regularly, other SERCs are not strictly adhering to provisions of the Electricity Act, 2003, regarding timely issuing of tariff orders.
The communication observed that at least three states – Maharashtra, Kerala and Himachal Pradesh – had not filed their tariff orders for FY22 (2021-22) up to April 28, 2021. SERCs are generally expected to finalize and issue their tariff orders during March, applicable to the fiscal year beginning April 1.Most of the SERCs have issued their tariff orders for FY22 (April 1, 2021 to March 31, 2022) during March 2021.
Policy
- Issues relating to tariff regulations, determination of tariff, and the procedure for tariff order, are governed by provisions under Section 61, 62 and 64, respectively of the Electricity Act, 2003.
- The Appellate Tribunal for Electricity (APTEL), in its order of November 2011, issued directions to SERCs relating to ensuring regular and timely revision of tariffs, and regular truing up of tariffs. It also stressed on non-creation of fresh regulatory assets, allowing carrying cost of past regulatory assets. Besides, the APTEL order stressed on putting in place a mechanism for fuel and power purchase cost adjustment.
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Distribution sector
The communication by the power ministry emphasized that the power distribution sector was a crucial element of the entire electricity value chain and that the sustainability of the entire power sector was critically dependent on the sustainability and growth of the distribution sector.
(Please note that this story is based on the power ministry’s letter dated May 3, 2021. The position could have changed in the interim.)
