FAQ regarding tarrif

Frequently asked questions related to tariff

Ans: Tariff must be sufficient to cover the costs for providing a reliable and quality energy supply and ensuring a financially viable power sector to attract necessary investments for the expansion of capacity.

Ans: True. Post submission of Petition by the Utility and Technical Validation, Public Notice is issued confirming the date of Public Hearing and comments are invited from Public. Replies need to be provided by the Utility within the time frame provided by MERC. The Public Hearing is then conducted.

Ans: Generation Business, Transmission Business and Distribution Wires Business is entitled to earn 15.5% return on the equity (RoE) at the beginning of the Year and 15.5% return on the 50% of the Equity added during the year.

Retail Supply Business is entitled to earn 17.5% return on the Equity (RoE) at the beginning of the Year and 17.5% return on the 50% of the Equity added during the year.

Ans: 4 Years, as per MERC (Multi Year Tariff) Regulations, 2015

Ans: Review can be made to MERC and appeal can be made to Appellate Tribunal for Electricity (ATE) and further to Supreme Court (SC).

Ans: Yes. MERC MYT Regulations, 2015 speaks about the sharing methodology on account of Controllable Factors and Uncontrollable Factors.

2/3rd of gains on account of Controllable Factors will be passed on to customers as rebate in Tariff and balance shall be retained by the Generating Company or Licensee.

1/3rd of loss on account of Controllable Factors will be passed on to customers as additional charge in Tariff and balance shall be absorbed by the Generating Company or Licensee.

Gains on account of Uncontrollable factors will be passed on to the customers entirely.

Ans: Controllable Factors:

Operation & Maintenance expenses, Technical and commercial losses, Interest and Finance charges, Performance parameters.

Uncontrollable Factors:

Sales, Power Purchase Cost, Change in Law, Force Majeure events.

Ans: FAC stands for Fuel Adjustment Cost. Any variation in the fuel cost when compared to the approved cost by MERC can be recovered through the mechanism of FAC.

Ans: Four,

(i) Reliance Infrastructure Limited (RInfra),

(ii) Tata Power Company Limited (TPCL)

(iii) Brihanmumbai Electric Supply and Transport Undertaking (BEST) and

(iv) Maharashtra State Electricity Distribution Company Limited (MSEDCL).

Ans: Regulatory Assets are various costs incurred by the distribution licensee and duly approved by the Regulatory Commission, but deferred for recovery from consumers to avoid tariff shock to consumers.