Regulatory bodies for Electricity in India

Regulatory commissions, Central Electricity Regulatory Commission (CERC) at the central level, and State electricity regulatory commissions (SERC) at the state level will monitor the electricity generation, transmission and distribution in the country.

The primary function of the CERC will be to regulate the tariff of electricity generating companies owned or controlled by the Central Government. The job of setting the tariffs of Central generating stations, as well as transmission charges for transmission companies, have so far been discharged by the Central Government in consultation with the Central Electricity Authority (CEA).

The commission will regulate inter-State transmission including tariff of the transmission utilities. Interstate and inter-regional displacement of power, which is currently being overseen by the CEA, would be henceforth transferred to the CERC. Regulation of inter-state sale of power, and advising of the Central Government in the formulation of tariff policy, are the other functions of CERC. The CERC is a quasi-judicial body, where the chairperson has to have been either a judge of the Supreme Court or the Chief Justice of a High Court. The CERC would take over functions from the CEA and would be the nodal authority at the center for matters related to power. CEA on the other hand would continue its function of approving projects as well as their capacity, clearing sites for the projects and the fuel to be used for power generation. CEA would also undertake the operation of forming power plans for the country and providing technical inputs to the commission.

The main function of the State Electricity Regulatory Commission will be to determine the tariff for electricity, wholesale, bulk, grid and retail. The fixation of bulk and retail tariffs is now being undertaken by the state electricity boards (SEBs). The SERC will also determine the tariff payable for use of the transmission facilities and regulate power purchase and procurement process of the transmission utilities. Other than these functions, each State Government on its own can assign other regulatory functions to SERCs.

Till such time that the State Governments transfer the power of regulating investment in generation, transmission and distribution to the SERC, it would be mandatory on the part of the CEA to accord its techno-economic clearance for power projects.

Once the investment clearance decision is transferred by the State to the SERC, the SERC would then be entrusted with the job of issuing TECs for all power projects. Hence, by default, the SERCs are tariff bodies unless further powers are delegated to them by the State Governments. Issuance of licenses would remain in the domain of the State Governments. The SERC would enter in at a stage when the tariff is required to be examined.

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