State Regulatory Commissions must ensure annual tariff increase
Punjab Newsline Network
Monday, 28 November 2011
NEW DELHI:State Regulatory Commission must initiate suo-moto proceedings for tariff determination in case concerned state delays its tariff petition in time and should ensure increase in annual power tariff.Appellate Tribunal of Electricity in its order of November 11ordered it should be the endeavor of every State Commission to ensure that the tariff for the financial year is decided before 1st April of the tariff year.

The State Commission could consider making the tariff applicable only till the end of the financial year so that the licensees remain vigilant to follow the time schedule for filing of the application for determination of annual revenue requirement (ARR) /tariff.In the event of delay in filing of the ARR by the state one month beyond the scheduled date of submission of the petition the commission should initiate suo- motto to determine the tariff for financial year Fuel and Power Purchase cost is a major expense of the distribution Company which is uncontrollable.

Every State Commission must have in place a mechanism for Fuel and Power Purchase cost. The Fuel and Power Purchase cost adjustment should preferably be on monthly basis on the lines of the Central Commission’s Regulations for the generating companies but in no case exceeding a quarter.

Tribunal was acting suo- motto on the Secretary Ministry of Power letter dated January 11 to the Chairperson of this Tribunal complaining that most of the State distribution utilities have failed to file annual tariff revision petitions in time. This has led to position where in a number of States, tariff revision has not taken place for a number of years resulting in the poor financial health of the State distribution utilities.

State Commissions namely Tamil Nadu, Tripura and Rajasthan have raised the doubts with regard to the authority of the State Commissions to take suo moto action for determination of tariff in the absence of the Tariff applications.