MoP issues draft amendments to Tariff Policy, 2016

The Ministry of Power (MoP) has issued draft amendments to the Tariff Policy, 2016. As per the proposed amendments, any change in domestic duties, levies, charges, surcharges, cess and taxes after the award of bids, which changes the project cost, would be treated under “Change in Law and allowed as pass-through, subject to approval by the appropriate commission. Further, in order to ensure that the burden of the inefficiencies of discoms is not passed on to consumers, the state electricity regulatory commissions will not consider aggregate technical and commercial (AT&C) losses exceeding 15 per cent for tariff determination after March 31, 2019. Also, penalties are proposed to be introduced against discoms for unscheduled load shedding without valid reasons.Further, if state governments want to give a subsidy to certain sections of consumers, it should be done through the direct benefit transfer mechanism. The draft policy also seeks to exempt power plants of all central public sector units from mandatory tariff-based competitive bidding. Other amendments relating to renewable purchase obligations, cost of supply and electric vehicles have also been proposed.

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