Regulators should ensure that tariffs are cost-reflective: Power and New & Renewable Energy Minister

The Union Minister for Power and New & Renewable Energy recently engaged in discussions with regulatory authorities from central, state, and joint electricity regulatory commissions to discuss the actions required from the regulatory commissions to ensure a dynamic power sector. During the meeting, the minister assessed the progress in various fronts of the power sector.

The minister stressed on the importance of regulators ensuring that tariffs accurately reflect the costs associated with the services provided by distribution companies (discoms). He highlighted that the Indian government has made energy audits mandatory, and these audits will be closely monitored. The minister highlighted the importance of implementing prepaid meters across the country. This rollout is expected to enhance the billing and collection efficiency of discoms, leading to an overall improvement in their financial stability. Additionally, the introduction of prepaid meters will reduce the working capital demands of discoms as a result of upfront payments made by consumers.

Furthermore, the minister emphasised that although the state government has the authority to decide on providing subsidies to specific consumer categories, it is the responsibility of the state commissions, as regulators, to ensure that discoms receive the subsidy amount from the state government. The minister further highlighted that the Electricity (Rights of Consumers) Rules provide for penalties for unnecessary load shedding. Additionally, the importance of enforcing these rules and ensuring their implementation was also highlighted.