Regulators can revise power tariffs: Tribunal

Written by Noor Mohammad | Noor Mohammad | New Delhi | Updated: Nov 19 2011, 05:44am hrs
The Apex electricity regulator Appellate Tribunal for Electricity (Aptel) has ruled that state electricity regulators indeed have the power to initiate revision proceedings on a suo motu basis in case discoms do not file annual revenue requirement (ARR) petition within the stipulated time.

FE had reported on October 28 that regulators have agreed to initiate tariff proceedings on their own if discoms fail to submit their petition by November end. The decision was taken in a recent meeting of the Forum of Regulators.

The regulator has given its judgement in a case which it initiated on its own on the receipt of a letter from Union power secretary Uma Shankar.

Regulatory commissions from states like Tamil Nadu, Rajasthan and Tripura had been submitted before Aptel as per the Act, they do not have the power to initiate proceedings for tariff on their own.

At present, tariff revision is recommended by regulators on the basis of annual revenue requirement (ARR) petitions filed by distribution companies by November every year. As state governments wield full control over the distribution entities political considerations often prevail over economic prudence, preventing the annual revision of tariffs envisaged in the Electricity Act.

The latest move comes after the power ministry decided to hold regulators accountable for tariff revision delays. Following a petition filed by the ministry early this year, the Aptel asked state electricity regulatory commissions (SERCs) why they avoid using their power for suo motu tariff revision.

Due to pressure from state governments, discoms are reluctant to approach regulators for tariff revision, vastly expanding their losses. Combined discom losses are estimated to have crossed R1 lakh crore.