Some of the clauses defined in the notification which identify CERC's control over utilities include its right to get the books and records of the utilities concerned examined by its officers or consultants at any time.

These utilities are also obliged to submit periodic returns containing operational cost data. This will enable the commission monitor the implementation of its order and reassess the basis on which tariff was approved.

Defining its powers and procedure as per Section 55 of the Electricity Act 1998, it says: "No utility or power generating company that supplies electricity to more than one state shall charge tariff without the approval of the commission. The rule also applies to transmission of energy. All inter-state power purchase and transmission agreements between stateelectricity boards or private companies need prior approval of the commission. The broad guidelines for tariff regulation will be circulated to the concerned parties shortly."

On the basis of the prescribed norms, these companies shall submit the tariff proposals to the commission for approval. The commission may approve differential tariffs linked to factors like time of the day metering (TOD) and payment terms.

According to the commission, some factors on the basis of which it will determine tariff include the need to link tariff adjustments to increase the productivity of the capital employed and the interests of consumers; rationalisation of tariff on the basis of generation and transmission cost; incentives to enhance efficiency of generation, transmission and service; environmental standards and provisions for level-playing field to promote competition and growth of the industry.

Besides regulating wheeling charges payable to the central transmission utility, CERC will also regulate the chargespayable to other transmission utilities for wheeling inter-state power. Any dispute between generation and transmission companies will be referred to the commission.

The commission is also empowered to pass orders for collection of information, inquiry, investigation, search and seizure. To undertake these functions, it may take the assistance of any institution or consultant.

However, the parties concerned will be asked to file objections and make submission on reports prepared by the commission or its authorised consultant.

Apart from the tariff regulation, the commission shall also approve the code concerning planning, development and integrated operation of power system and grant of transmission licence. These will be notified as per the Indian Electricity Grid Code. This will include the norms for obtaining transmission licence and grid management.

The commission has also explained the procedure for settlement of dispute between companies, SEBs and consumers. It will hold hearings, meetings,deliberations, inquiries and consultations. Apart from taking up the issues in these fora, the parties concerned can also file petitions with the commission. The commission also acts as an arbitrator.

In less than a year since its inception, CERC has taken major steps in formulating detailed guidelines for various functions. With the recent amendment in the Electricity Act, the commission was allowed to regulate tariff from May 15. It is in the process of setting norms for fixing power tariff structure. These will be circulated to the concerned utilities soon.

However, since CERC deals only with the central power (generation and transmission) utilities, SEBs and private companies those generate or transmit energy in two or more state, it will only regulate inter-state tariff.

Tariffs in states will be regulated by the State Electricity Regulatory Commissions to be set up by the states. Legally the states, however, are not bound to set up these commissions.

In absence of regulatory commissions, thestate governments will still have the final say in deciding tariff. Setting up of these commissions was proposed under the common minimum plan approved by all political parties for the power sector reforms in 1996. However, there are states which, for certain political reasons, are not setting up these commissions.

Maharashtra, which was to set up the commission way back by September, has still not made up its mind on the issue. Meanwhile, reportedly less progressive states such as Haryana and Gujarat have already set up these bodies.