MoP issues notification onautomatic pass through of fuel and power procurement cost in tariff

The Ministry of Power has issued a notification for automatic pass through of fuel and power procurement cost in tariff.

This would result in less working capital requirements by the discoms leading to less costs of power for the consumers.Some states already have a formula for fuel surcharge adjustment for this purpose. However, this is not an automatic pass through and there remains need for approval of the state commission. MoP has also asked all stakeholders in the power sector value chain to ensure timely recovery of cost, which involves the cost pass through by generating companies to the distribution companies, or discoms, and from the discoms to the consumer.

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