Government cannot directly regulate power tariff: Scindia

There is no provision for government to directly regulate electricity tariff and rates are determined by regulatory commissions, Power Minister Jyotiraditya Scindia said today.

There have been lots of discussions in recent times on power tariff in different states with some governments reducing electricity prices.

In a written reply to the Lok Sabha, Scindia said tariff of distribution companies are determined by the State/Joint Electricity Regulatory Commissions (SERCs/JERCs) based on the principles enunciated under the Electricity Act, 2003 and policies framed thereunder.

"There is no provision for direct regulation of the electricity tariff by the government," the Minister said.

However, through appropriate policy framework and programmes, the government is promoting efficiency in generation, transmission and distribution business as also supporting strengthening of the distribution infrastructure, he added.

Noting that the aim is to reduce the Aggregate Technical and Commercial (AT&C) losses, the Minister said "these measures, along with government's emphasis on discovery of tariff through competitive bidding, contribute towards lowering of tariff rates".

Electricity tariff for generation and transmission companies owned or controlled by the central government is regulated by the Central Electricity Regulatory Commission (CERC).

In the case of generation, supply and transmission within the state, the tariffs are determined by respective state regulatory authorities.

The Minister said that Section 61 of the Electricity Act provides for guiding principles which the appropriate commission is required to consider for specifying the terms and conditions of tariff.

"As per Section 61(i), the regulatory commissions are also guided by the tariff policy notified by the central government while specifying the terms and conditions of tariff," Scindia said.