Lok Sabha Question No. 98 (STARRED), answered on 2019-06-27
Subject: Norms for Power Tariff
Ministry: POWER
Asked by: D.K. Suresh

## GOVERNMENT OF INDIA MINISTRY OF POWER

LOK SABHA STARRED QUESTION NO.98 TO BE ANSWERED ON 27.06.2019

## NORMS FOR POWER TARIFF

- *98. SHRI D.K. SURESH:

Will the Minister of POWER be pleased to state:

- (a) the norms/criteria laid down by the Government to fix power tariff in the country;
- (b) whether  the  power  tariff  being  charged  by  the  private  power distribution companies in the country is much higher as compared to the tariff in other developing/developed countries;
- (c) if so, the details thereof along with the reasons therefor; and
- (d) the  steps  taken/being  taken  by  the  Government  to  rationalise  the power tariff?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, NEW & RENEWABLE  ENERGY  AND THE MINISTER OF STATE FOR SKILL DEVELOPMENT & ENTREPRENEURSHIP

( SHRI  R.K. SINGH)

(a) to (d) :  A Statement is laid on the Table of the House.

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STATEMENT

STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF STARRED QUESTION NO.98 TO BE ANSWERED IN THE LOK SABHA ON 27.06.2019 REGARDING NORMS FOR POWER TARIFF.

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(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 a generating company to a distribution licensee, transmission of electricity, wheeling of  electricity  and  retail  sale  of  electricity.  Section  61  of  the  Electricity Act,  2003  and  the  tariff  policy  provide  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.

(b) to (d) :   Power Distribution tariff is 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  other  developing  /developed  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 constituted by the Government gave its recommendation for simplification of consumer categories.  Based  on  the  recommendations  of  the  Committee and  further  consultations  with  stakeholders,  suitable  changes  including reduction in tariff slabs and consumer categories have been proposed in the draft Tariff Policy.

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ANNEXURE  REFERRED  TO  IN  PART  (a)  OF  THE  STATEMENT  LAID  IN REPLY  TO  STARRED  QUESTION  NO.  98  TO  BE  ANSWERED  IN  THE  LOK SABHA ON 27.06.2019 REGARDING NORMS FOR POWER TARIFF.

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## 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

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