Power Ministry Writes to States/UTs to Issue Tariff Orders on Time

The Ministry of Power in a letter to state and UT energy departments and SERCs has requested for the timely issuing of tariff orders

The Ministry of Power in a letter to state and UT energy departments and State Energy Regulatory Commissions has requested for the timely issuing of tariff orders under the Electricity Act, 2003. The ministry stated that some SERCs have been issuing tariff orders regularly in every financial year, however, some of the other SERCs are not strictly adhering to the provisions of the Act for timely issuing of the tariff orders.

Ghanshyam Prasad, Joint Secretary to the GOI, in the letter said “I would like to draw your kind attention to the provisions of Sections 61, 62 and 64 of the Electricity Act, 2003 regarding Tariff Regulations, Determination of tariff and Procedure for tariff order respectively.” And that as per these provisions only a few SERCs have been issuing timely tariff orders.

In this regard, the ministry stated that it is important to mention that APTEL had issued an order on issues related to Tariff Revision. In the Order, certain directions were issued to the State Commissions. These directions related to –

i. Ensuring regular and timely revision of Tariffs including regular Truing up of Tariffs

ii. Non creation of fresh Regulatory Assets, allowing Carrying cost of the past Regulatory Assets

iii. A mechanism for Fuel and Power Purchase cost adjustment to be put in place.

Further, the ministry highlighted that the distribution sector is a crucial element of the entire electricity value-chain. Sustainability of the entire Power Sector is critically dependent on the sustainability and growth of the Distribution Sector.

As per information available with the Ministry of Power, some of the SERCS have not yet issued the tariff Orders for FY 2021-22 thereby not adhering to the provisions of the Electricity Act, 2003 and directions of the APTEL.

Thus, in order to comply with the APTEL directions and considering the importance of timely issuing of tariff orders under the provisions of Electricity Act, 2003, “I have been directed to request that tariff orders for the FY 2021-22 are issued at the earliest in order to ensure the financial health of Discoms in your State,” said Ghanshyam Prasad, Joint Secretary to the GOI.

The status report regarding issuance of tariff orders for 2021-22 by SERCS must be intimated to this Ministry at the earliest.

The status of the tariff orders for FY 2021-22 issued till 28th April 2021: