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The “Uttarakhand Electricity Regulatory Commission (Terms and Conditions for Determination of Multi Year Tariff) Regulations, 2024” establishes guidelines for setting electricity tariffs across the state for the period from April 1, 2025, to March 31, 2028. It applies to various cases, including electricity supply by generating companies to distribution licensees, intra-state transmission of electricity, and retail supply of electricity. However, it does not cover tariff determination for renewable energy projects or those governed by competitive bidding.
The regulations are meant to ensure transparency and efficiency in tariff determination. Tariff applications are expected to include detailed business plans, capital investment, and performance reviews for each financial year within the control period. This includes plans for capital investment, operating expenses, and other relevant factors. The regulations also set norms for determining the Aggregate Revenue Requirement (ARR), which includes all allowable expenses and returns for utilities. The ARR is determined through a comprehensive process of examining forecasted revenue, operational expenses, and performance targets for generating companies, transmission licensees, and distribution licensees.
The regulations focus on improving operational efficiency by setting norms for performance, such as station heat rates, auxiliary consumption, and transmission losses. These norms act as a ceiling, encouraging utilities to improve efficiency. Any deviations from the approved norms, whether due to controllable or uncontrollable factors, are assessed annually. Utilities are held accountable for performance, with gains or losses shared between utilities and consumers. For example, uncontrollable factors like changes in law or natural calamities are adjusted in tariffs, while controllable factors like operational inefficiencies result in penalties or incentives.
The capital cost, which is a key component in determining tariffs, is assessed based on prudence checks. This includes analyzing expenses for new projects, interest during construction, and incidental expenditures. The regulations also require utilities to regularly update their performance data and submit detailed reports to the Commission. These reports are essential for adjusting tariffs based on actual performance versus forecasted performance.
At the end of each control period, the Commission reviews the performance of utilities against the set targets. This review is crucial for setting new base values for the subsequent control period. Any surplus or deficit in revenue recovery is adjusted in future tariffs, with carrying costs applied to ensure fairness.
These regulations aim to balance the interests of electricity consumers, distribution licensees, and generating companies, ensuring a transparent and efficient process for determining electricity tariffs while promoting competition and efficiency within the electricity sector in Uttarakhand. |
