State Electricity Regulatory Commissions

State Electricity Regulatory Commissions are statutory bodies that regulate the electricity sector at the state level. Established under Section 82 of the Electricity Act, 2003, they exercise regulatory, adjudicatory and advisory functions, principally listed in Section 86, covering tariffs, electricity procurement, licensing, service standards and renewable energy.

Tariffs, procurement and licensing

The Commission regulates the prices and commercial arrangements through which electricity reaches consumers within the state.

• It determines tariffs for electricity generation, supply, transmission and wheeling, including wholesale, bulk and retail transactions within the state, subject to the Act.
• Under Section 63, it adopts tariffs determined through transparent competitive bidding conducted according to Central Government guidelines.
• It regulates distribution licensees’ electricity procurement, including the prices and agreements governing purchases for distribution and supply within the state.
• It facilitates intra-state transmission and wheeling, and issues licences for intra-state transmission, distribution and electricity trading.
• It fixes the trading margin for intra-state electricity trading if it considers this necessary.

Renewable energy and service quality

Its mandate extends beyond pricing to the development of renewable energy and the technical quality of electricity services.

• It promotes cogeneration and renewable energy by providing suitable measures for grid connectivity and sale of electricity to any person.
• It specifies a percentage of total electricity consumption within a distribution licensee’s area that must be purchased from these sources.
• It specifies a State Grid Code consistent with the Grid Code specified by the Central Electricity Regulatory Commission.
• It specifies or enforces standards for the quality, continuity and reliability of services provided by licensees.

Dispute resolution and regulatory powers

The Commission also provides a statutory forum for resolving specified electricity-sector disputes.

• It adjudicates disputes between licensees and generating companies and may refer disputes to arbitration.
• It levies fees for the purposes of the Act and performs other functions assigned under it.
• For tariff determination, Section 61 requires guidance by principles including efficiency, economical use of resources, consumer protection and reasonable recovery of electricity costs.

Advice, transparency and policy guidance

• It advises the State Government on competition, efficiency and economy, investment, electricity-industry restructuring, and other referred matters.
• Section 86(3) requires transparency in the exercise of its powers and discharge of its functions.
• Under Section 86(4), it is guided by the National Electricity Policy, National Electricity Plan and Tariff Policy.