Chapter VIII Chapter VIII

Tariffs

1. (1) The holder of each licence granted under this Act shall observe the methodologies and procedures specified by the Commission from time to time in calculating the expected revenue from charges which it is permitted to recover pursuant to the terms of its license and in determining tariffs to collect those revenues.
2. (2) The Commission shall, save as provided in sub-section (3), be entitled to prescribe the terms and conditions for the determination of the licensees' revenues and tariffs by regulations duly published in the Gazette and in such other manner as the Commission considers appropriate and, for doing so, the Commission shall be bound by the following parameters, namely:-
   • (a) the financial principles and their applications provided in sections 57 and 57A of the Electricity (Supply) Act, 1948 and in the Sixth Schedule thereto;
   • (b) the factors which would encourage efficiency, economic use of the resources, good performance, optimum investments, performance of license conditions and other matters which the Commission considers appropriate for the purposes of this Act; and
   • (c) the interest of the consumers.
3. (3) Where the Commission departs from factors specified in the Sixth Schedule to the Electricity (Supply) Act, 1948 while determining the licensees' revenues and tariffs, it shall record the reasons therefor in writing.
4. (4) Every licensee shall provide to the Commission at such time and in such manner as may be prescribed in the regulations, full details of its calculation for the ensuing financial year of the expected aggregate revenue from charges which it believes to have been permitted to recover in accordance with the terms of its licence and thereafter it shall furnish such further information as the Commission may reasonably require to assess the licensee's calculation. Within ninety days of the date on which the licensee has furnished all the information that the Commission requires, the Commission shall notify the licensee either-
   • (a) that it accepts the licensee's calculation; or
   • (b) that it does not consider the licensee's calculation to be in accordance with the methodology or procedures in its licence and such notice to the licensee shall,-
     • (i) specify fully the reasons why the Commission considers that the licensee's calculation does not comply with the methodology or procedures specified in its license or is in any way incorrect; and
     • (ii) propose a modification, or an alternative calculation of the expected revenue from charges, which the licensee shall accept.
5. (5) Each holder of supply licence shall publish in the daily newspaper having circulation in the area of supply and make available to the public on request the tariff or tariffs for the supply of electricity within its licensed area of supply and such tariff or tariffs shall take effect only after seven days from the date of such publication. Any tariff implemented under this section,-
   • (a) shall not show undue preference to any consumer of electricity, but may differentiate according to the consumer's load factor or power factor, the consumer's total consumption of energy during any specified period, or the time at which supply is required;
   • (b) shall be just and reasonable and be such as to promote economic efficiency in the supply and consumption of electricity; and
   • (c) shall satisfy all other relevant provisions of this Act and the conditions of licence.
6. (6) No tariff or part of any tariff implemented under sub-section
7. (5) may be amended more than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be prescribed by regulations. At least three months before the proposed date for implementation of any tariff or an amendment to a tariff the licensee shall provide details of the proposed tariff or amendment to a tariff to the Commission, together with such further information as the Commission may require to determine whether the tariff or amended tariff would satisfy the provisions of sub-section (5). If the Commission considers that the proposed tariff or amended tariff of a licensee does not satisfy any of the provisions of sub-section (5), it shall, within ninety days of the receipt of all the information which it required, and after consultation with the Commission Advisory Committee constituted under section 32 and the licensee, notify the licensee that the proposed tariff or amended tariff is unacceptable to the Commission and it shall provide to the licensee an alternative tariff or amended tariff which shall be implemented by the licensee. The licensee shall not amend any tariff unless the amendment has been approved by the Commission.
8. (7) Notwithstanding anything contained in sections 57-A and 57-B of the Electricity (Supply) Act, 1948, no Rating Committee shall be constituted after the date of commencement of this Act and the Commission shall secure that licensees comply with the provisions of their licences regarding their charges for the sale of electricity, both wholesale and retail, and for the connection to and use of their assets or systems in accordance with the provisions of this Act. Explanation-In this section-
   • (a) "the expected revenue from charges" means the total revenue which a licensee is expected to recover from charges for the level of forecast supply used in the determination under sub-section
9. (4) in any financial year in respect of goods or services supplied to customers pursuant to a licensed activity; and
   • (b) "tariff" means a schedule of standard prices or charges for specified services which are applicable to all such specified services provided to the type or types of customers specified in the tariff.

1. (1) The State Government may from time to time, make subventions to any licensee for the purpose of sub-section
2. (3) of section 12 for such amounts as may be recommended by the Commission and on such terms and conditions as the State Government may determine.
3. (2) The State Government may, from time to time, advance loans to any licensee or generating company which for the time being is wholly or substantially owned by the State Government, on such terms and conditions, not inconsistent with the provisions of this Act or the Electricity (Supply) Act, 1948, as the State Government may determine.
4. (3) The State Government may guarantee in such manner as it thinks fit the repayment of the principal or the payment of interest, or both, of any loans proposed to be raised by any licensee or generating company which is for the time being wholly or substantially owned by the State Government, or the discharge of any other financial obligation of any such licensee or generating company : Provided that the State Government shall, so long as such guarantee is in force, lay before the State Legislature during the budget-session in every year a statement of the guarantee, if any given during the current financial year of the State and an up-to-date account of the total sums, if any, which have been paid out of State revenues in each case by reason of any such guarantees or paid into state revenues towards repayment of any money so paid out.
5. (4) The State Government shall be entitled to inspect and verify the accounts of every licensee and generating company.