Lok Sabha Question No. 2212 (UNSTARRED), answered on 2018-03-08
Subject: Power Tariff
Ministry: POWER
Asked by: SANJAY SHAMRAO DHOTRE, BHARTRUHARI MAHTAB, RAHUL RAMESH SHEWALE

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.2212 TO BE ANSWERED ON 08.03.2018 POWER TARIFF

2212. SHRI SANJAY DHOTRE: SHRI BHARTRUHARI MAHTAB: SHRI RAHUL SHEWALE:

Will the Minister of POWER be pleased to state:

- (a) the norms or guiding principles laid down in the Electricity Act, 2003 for regulation of power tariff in the country;
- (b) whether the cases of violation of the said norms/guiding principles by the private sector power distribution companies have come to the notice of the Government during each of the last three years and the current year, if so,  the  details  thereof,  State/UT-wise  including  Delhi  and  the  reasons therefor along with the action taken/being taken by the Government against such companies;
- (c) whether  the  power  tariff  of  the  said  companies  is  higher  than  the tariff charged by the companies in neighbouring countries, if so, the details thereof, country-wise along with the measures taken by the Government to bring power tariff lower or at par with the tariff in such countries; and
- (d) the other steps taken by the Government in this direction?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER AND NEW & RENEWABLE ENERGY

( SHRI  R. K. SINGH )

(a) : As per the provisions given in Section 61 to Section 64 of the Electricity  Act,  2003,  the  Appropriate  Electricity  Regulatory  Commission determines  the  electricity  tariff  for  supply  of  electricity  by  generating company to distribution  licensee,  transmission  of  electricity,  wheeling  of electricity  and  retail  sale  of  electricity.  Section  61  of  the  Electricity  Act, 2003 provides for the guiding principles and the terms and conditions for determination of tariff by the Appropriate Commission. A copy of relevant extract is provided as Annexure.

........2.

(b) to (d) :    No cases of violation of the Tariff determination norms/guiding principles by the Appropriate Commission have come to the notice of the Government.  Safeguarding  of  consumers'  interest  and  at  the  same  time, recovery  of  the  cost  of  electricity  in  a  reasonable  manner  is  one  of  the guiding  principles  under  Section  61  of  the  Electricity  Act  2003.  Power Distribution  tariff  is  being  determined  by  the  respective  State  Electricity Regulatory Commissions. The distribution tariff varies from State to State depending upon the actual cost of supply of electricity, tariff norms and the subsidy, if any, provided for any class of consumers.  Similarly the electricity  tariff  in  neighbouring  countries  depends  upon  the  energy  mix, electricity market structure, rules & regulations thereof prevailing in that country.  Government  of  India  had  taken  note  of  the  fact  that  there  are different  numbers  of  tariff  slabs  and  categories  of  consumers  exist  in different States for retail supply of electricity. A committee was constituted by Ministry of Power, Govt. of India to give  recommendations for simplification  of  consumer  categories.  The  Committee  has  submitted  its recommendations  which  include  reduction  in  tariff  slabs  and  consumer categories.  The  Committee  report  is  under  consideration.  Government  of India  has  requested  States  to  ensure  24x7  power  for  all  consumers  from April,  2019.  The  states  have  also  been  advised  that  Aggregate  Technical and Commercial (AT&C) losses be brought down to less than 15% and it is proposed to amend the tariff policy to provide that after the 1st of January 2019 the maximum losses which can be passed on in tariff will not be more than 15%.

****************

ANNEXURE

ANNEXURE REFERRED TO IN REPLY TO PART (a) OF UNSTARRED QUESTION NO. 2212 TO BE ANSWERED IN THE LOK SABHA ON 08.03.2018 ***********

Section 61 (Tariff Regulations)

The  Appropriate  Commission  shall,  subject  to  the  provisions  of  this  Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:-

(a) the principles and methodologies specified by the Central Commission  for determination of the tariff applicable to generating companies and transmission licensees;

(b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles;

(c) the factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments;

(d) Safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner;

(e) the principles rewarding efficiency in performance;

(f) multi year tariff principles;

(g) that the tariff progressively reflects the cost of supply of electricity and also reduces cross-subsidies in the manner specified by the Appropriate Commission;

(h) the  promotion  of  co-generation  and  generation  of  electricity  from renewable sources of energy;

(i) the National Electricity Policy and tariff policy:

Provided that the terms and conditions for determination of tariff under the Electricity  (Supply)  Act,  1948,  the  Electricity  Regulatory  Commission Act, 1998  and  the enactments  specified in the Schedule  as  they stood immediately before the appointed date, shall continue to apply for a period of one year or until the terms and conditions for tariff are specified under this section, whichever is earlier

**************