The Appropriate Commission shall, subject to the provisions of this Act,

specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:-

1. (a) the principles and methodologies specified by the Central

Commission for determination of the tariff applicable to generating companies and

transmission licensees;

1. (b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles;
2. (c) the factors which would encourage competition, efficiency,

economical use of the resources, good performance and optimum investments;

1. (d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner;
2. (e) the principles rewarding efficiency in performance;
3. (f) multi year tariff principles;
4. (g) that the tariff progressively reflects the cost of supply of electricity and also, reduces and eliminates cross-subsidies within the period to be specified by the Appropriate Commission;
5. (h) the promotion of co-generation and generation of electricity from renewable sources of energy;
   • (i) the National Electricity Policy and tariff policy: Provided that the terms a

nd conditions for determination of tariff under

the Electricity (Supply) Act, 1948, the Electricity Regulatory Commission Act, 1998 and the enactments specified in the Schedule as they stood immediately before the appointed date, shall continue to apply for a period of one year or until the terms and conditions for tariff are specified under this section, whichever is earlier.

Determination of Tariff.

process.

1. (a) supply of electricity by a generating company to a distribution licensee:

1. (b) transmission of electricity ;
2. (c) wheeling of electricity;
3. (d) retail sale of electricity.

Provided that in case of distribution of electricity in the same area by two or

more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.

1. (2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of

generation, transmission and distribution for determination of tariff.

1. (3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.
2. (4) No tariff or part of any tariff may ordinarily be amended more frequently 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 specified.
3. (5) The Commission may require a licensee or a generating

company to comply with such procedures as may be specified for calculating the

expected revenues from the tariff and charges which he or it is permitted to recover.

1. (6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest

equivalent to the bank rate without prejudice to any other liability incurred by the

licensee.

63. Notwithstanding anything contained in section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government.