Power ministry asks states to issue FY22 tariff orders

Reminding state electricity regulators to abide by the provisions of the Electricity Act, 2003, the Union power ministry has asked a number of states to issue tariff orders for FY22 “at the earliest” for their power distribution companies (discoms). Irregular tariff revisions limit the discoms’ ability to become financially viable, which in turn, leads to delayed payment to power generators and makes it difficult to maintain and upgrade their own network and systems.

“Some of the SERCs are issuing tariff orders regularly in every financial year whereas some of the other SERCs are not strictly adhering to the provisions of the Act for timely issuing of the tariff orders,” the power ministry’s letter said. The recipients of the letter include major power consuming states such as Uttar Pradesh, Tamil Nadu, Chhattisgarh, Karnataka, Rajasthan, Madhya Pradesh, Punjab, Telangana and West Bengal.

The Centre has also asked the states to restrict the creation of fresh “regulatory assets” — a jargon for recoverable discom expenses which regulators acknowledge as pass-through costs, but are not immediately built into tariffs — and allow the carrying costs to discoms for past regulatory assets. Major states which have already issued the tariff orders for FY22 include Maharashtra, Andhra Pradesh, Gujarat, Assam, Haryana, Bihar, Odisha and Kerala.

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