In the power generation area, the tariff charged by the power generating companies, owned or controlled by the central government through a composite scheme, is considered as bulk tariff. In the transmission sector, inter-state transmission of electricity charges will also be determined by the CERC.

``We are gathering views from various concerned parties before taking the final decision,'' Rao said. The commission is holding round-table discussions with the state electricity boards (SEBs), state-owned power utilities, industry experts and consumers. It is also inviting suggestions from organisations connected with power industries, including private power companies, industry associations and consultancy firms.

The CERC has been given the mandate for evolving guidelines to determine electricity tariff and transmission tariff through the Electricity Regulatory Act 1998.

Rao said that the commission would not make drastic changes in the tariffs which will affect the returns of the power producers. ``However, our aim is to bring about the rationalisation and transparency in the system,'' he said.

``The commission would like to make changes in some crucial areas of tariff fixation. These include the determination of tariff on the basis of outdated norms, the lack of certainty in the tariff payable at the time of transaction, the poor payment record of customers and the rampant indiscipline etc,'' stated Rao.

The tariff worked out by the commission would be reviewed whenever needed. This is necessary in view of the sudden changes in factors involved in the tariff fixations, Rao pointed out.

According to him, the commission will take stock of the situation at any given time and after consulting the concerned parties, it will make required changes. However, tariff would not be changed rapidly.

On the rationalisation of tariff, Rao said the commission expects to achieve a long-term trend of lowering down of electricity prices in real terms through the introduction of efficiency enhancing incentives and competition in supply. Tariffs would be structured in a manner to encourage competition in the power sector-- both generation and transmission.