2 days ago
SC orders recovery of 50k cr deferred power tariffs in Raj
Jaipur: Discoms in Rajasthan have been deferring power tariff hikes as they became a political tool under successive govts. But these are not subsidies and need to be collected from the consumers.
Currently, the discoms sit over Rs 50,000 crore of such deferred tariffs.
Earlier this month, the Supreme Court directed all the electricity regulators and discoms in the country to find ways to realise these revenues over a period of seven years starting from 2024 and it can be done by hiking power tariffs.
If the state govt does not intervene and pay the amount, the discoms will have to hike tariffs to recover the amount.
According to estimates, the discoms in the state need to raise electricity tariffs by at least 90 paise per unit from all consumers to recover the amount in seven years.
Additionally, the discoms pay around Rs 5,000 crore interest on the Rs 50,000 crore liability. If the future interest amount is added, the additional tariffs can cross Re 1 a unit.
The problem of the deferred revenues, called regulatory assets, is particularly severe in Rajasthan as its discoms account for over 25% of country's total regulatory assets.
In fact, the Rajasthan Electricity Regulatory Commission, incorporated provisions on regulatory assets in its 2025 tariff regulations that are in line with the Supreme Court's decision.
Manish Kumar Mahto of Centre for Energy, Environment and People, said, "Despite these stringent measures, the discoms did not outline any liquidation plans in their annual tariff petitions, as required under the regulations.
This omission underscores gaps in the regulatory framework and RERC's limited ability to enforce compliance."
Mahto said the apex court also capped annual revenue shortfall of discoms at 3% of the approved revenue requirement and limited regulatory asset creation to exceptional circumstances only.
Mahto said that on top of concerns about high surcharges themselves, there are questions about how they will fit within tariff structures.
"In their tariff petitions for FY26, the discoms have proposed that the combined Regulatory Asset Surcharge and Fuel and Power Purchase Adjustment Surcharge (FPPAS) be capped at Re 1 per unit. With base fuel surcharges for this year being charged at 28 paise per unit and actual fuel surcharges reaching as high as 56 paise per unit in last two years, there is little scope to recover even the initial 90 paise per unit regulatory asset surcharge required for regulatory asset liquidation," he added.
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