Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014

The Central Electricity Regulatory Commission’s (CERC) recommendations in the draft regulations for 2014-19, if accepted, may bring down tariffs marginally across the country but will hurt central power companies and spell more financial trouble for state utilities. Tariff regulations are reviewed every five years. The existing regulations will expire on March 31, 2014. The draft aims at cutting flab from the tariff structure and usher in more efficiency. But, one change that will benefit consumers the most is the suggestion to scrap tax arbitration. Generation utilities are now allowed to charge the applicable tax rate from buyers even if they actually pay lower tax on account of depreciation, exemptions or incentives. In the new dispensation, companies will only charge the tax they have actually paid.