APTEL Comes Down on State Electricity Regulators for Delay in Tariff Revision

APTEL has given a deadline of October 31, 2019, for state electricity commissions to provide information on the same

September 24, 2019


The Appellate Tribunal for Electricity (APTEL) has directed the state and joint electricity regulatory commissions to explain the delay in the revision of the tariff, lack of payments to the distribution companies (DISCOMs) and gaps in revenue over the last three fiscal years.

The matter dates back to a letter from the secretary to the Ministry of Power, written in January 2011. The letter laid out various challenges faced by distribution utilities which resulted in a serious impact on the financial status of the electricity sector. The matter was discussed, and the tribunal directed state electricity regulatory commissions that an annual performance review, true-up of past expenses, annual revenue requirement (ARR), and tariff determination must be conducted yearly on a timely basis.

However, state commissions of Andhra Pradesh, Manipur, Mizoram, Jharkhand, Punjab, Meghalaya, Tamil Nadu, and West Bengal have not been complying with those directions of the tribunal passed in November 2011. Following are the latest directions of the tribunal:

“We direct all the state and joint regulatory commissions to furnish the necessary information to the secretary of Forum of Regulators, who shall in turn file compilation of compliance reports before this tribunal. This exercise is to be completed on or before 31.10.2019.”

According to APTEL, the delay in tariff revisions was one of the main reasons for the financial stress that the state DISCOMs were witnessing. Currently, state DISCOMs owe power generators more than ₹525 billion ($7.4 billion).

Recently, the Central Electricity Authority’s (CEA) report stated that the total payment due for 513 renewable projects now amounts to ₹97.36 billion (~$1.36 billion) as of July 31, 2019, thus  showing an increase of nearly ~₹15 billion (~$0.21 billion) compared to the previous figure of ₹82.3 billion (~$1.14 billion) for the same period.

In May 2019, Mercom reported that payment delays were becoming a problem again for solar and wind project developers in India, especially in Andhra Pradesh, Tamil Nadu, and Telangana.