7 days ago
Electricity bills to rise as Supreme Court orders states to clear dues in 4 years
Electricity consumers across India should brace for a hike in power bills as the Supreme Court on Wednesday directed all states and Union Territories to clear long-pending dues owed to power distribution companies (DisComs) within four years. The dues, classified as "regulatory assets", have been accumulating for decades and now exceed Rs 1.5 lakh crore across the country.A bench of Justices PS Narasimha and Atul S Chandurkar passed a sweeping order asking State Electricity Regulatory Commissions (SERCs) to submit a time-bound roadmap for recovery of these amounts, while also tasking the Appellate Tribunal for Electricity (APTEL) to supervise the implementation of this court came down heavily on the regulatory commissions and APTEL itself for failing to curb the unchecked growth of regulatory assets over the years.
"Disproportionate increase in long-pending regulatory assets ultimately puts burden on the consumer," the bench noted, adding that "inefficient and improper functioning of the Commission and acting under dictation can lead to regulatory failure".Regulatory assets refer to the shortfall between the actual cost of electricity supplied by DisComs and the lower tariffs approved by state regulators. To keep consumer tariffs affordable, regulators often defer these payments to DisComs, creating a backlog. Over time, these deferred payments attract interest, turning into ballooning the case began with petitions filed by Delhi-based DisComs, the Supreme Court expanded its scope and issued notices to all states with pending regulatory assets. Advocate Shri Venkatesh, appearing for Tata Power Delhi Distribution Ltd, told India Today TV that "for years various commissions and state governments, due to lack of political will, allowed the regulatory assets to grow. The SC has now ordered that all such dues must be amortised over four years".The top court affirmed that Parliament had vested electricity regulators and APTEL with sufficient authority under the Electricity Act to manage tariff and payment structures, but lamented the failure to use these powers the Supreme Court acknowledged that tariffs will need to rise, it cautioned that "tariff increase must be reasonable" and that "regulatory assets should not exceed statutory percentage" going K Srivastava, another lawyer involved in the case, said that the ruling may actually help consumers in the long run. "This was a ticking time bomb. Now, with a fixed four-year window, the cost will be distributed gradually. It's not like tariffs will jump overnight from Rs 2 to Rs 4 per unit. The increase will be marginal and shared across all categories — domestic, commercial, and industrial," he Supreme Court has also asked State Commissions to explore the possibility of de-linking recovery of regulatory assets from tariffs, if feasible, to minimise consumer Delhi Electricity Regulatory Commission (DERC) and other state regulators must now submit implementation plans, under the monitoring of APTEL, as India's power sector stares at one of the most significant billing adjustments in recent years.- EndsTrending Reel
