THIRUVANANTHAPURAM: The Kerala State Electricity Regulatory Commission (KSERC) on Thursday published the Draft KSERC (Terms and Conditions for Determination of Tariff) Regulations, 2017, which require distribution licencees, including the KSEB to submit tariff proposals for four years at one go.
The regulations are meant for a four-year period from April 1, 2018, to March 31, 2022. Public hearings will be held at the Ernakulam Town Hall on January 3 and the KSERC office in Thiruvananthapuram on January 10 before finalising the draft, commission chairman Preman Dinaraj has said.
“The multi-year format (MYT) requires the licencees to submit the Aggregate Revenue Requirement (ARR) and Expected Revenue from Charges (ERC) petitions and tariff proposals, if any, for four years together. MYT will prevent tariff shock and provide long-term signals regarding power tariffs,” Dinaraj said.
Under MYT regime, the KSERC will issue a single order for the four-year control period, but the tariffs for each year would vary according to the requirements and situation. So how does this benefit the consumer? For industries, it means they will have an idea about what the tariffs for electricity - the basic requirement for any industry - will be beforehand. “The KSERC will also hold a mid-term appraisal in November 2019 to make any course corrections that are needed,” Dinaraj said.
A long-term perspective on price determination will force power utilities to plan for long term, attract investments in the power sector, enable prudent cost recovery for the power producer and improve the performance of the licencees, according to the KSERC. “On the commission’s part, we will have to perform a balancing act to protect the interests of the consumer and that of the power producer,” Dinaraj said.
MYT explained
The multi-year tariff (MYT) format is not a new concept. Under the present tariff regulations, the licencees had to file tariff proposals for three financial years from April 1, 2015, to March 31, 2018, under the existing tariff regulations floated in 2014. But the KSEB had opposed the regulations and went to court. A verdict is pending. In fact, after the KSEB failed to file tariff proposals, the commission had suo motu floated proposals and finalised the tariffs.