Karnataka Electricity Regulatory Commission (KERC) published the draft Multi-Year Tariff (MYT) Regulations, 2023 and invited public comments. We welcome the Commission’s initiative to consolidate the existing “Tariff Regulations” and “Terms and Conditions for Determination of Tariff for Transmission and Distribution and Retail Sale of Electricity Regulations”. This will provide clarity to utilities, consumers and investors in the state. We also welcome the proposals in the draft regulations which are in line with the FoR Model MYT Regulations.

Prayas (Energy Group) has proposed suggestions to prepare for the major changes expected in the upcoming control period in the state sector, as well as to bring about more accountability and transparency in tariff processes. Further, it suggests measures for planning and forecast, as well as cost and performance evaluation. Some of these suggestions include - 

  • A ‘Control Period’ to be comprised of five years, and not three years for Transmission and Distribution companies; with a mid-term review after two years.
  • Notifying a comprehensive framework for approving capital investment schemes in the state, clearly specifying the minimum threshold for DPR schemes. Further, the need to clearly stipulate the threshold for Tariff-based Competitive Bidding (TBCB) in the regulations.
  • Return on Equity (RoE) incentives for distribution segment to be linked to improvement in DT failure rate, outages
  • Mandating DISCOMs to submit plans for Demand Side Management (DSM) as part of its ARR petition for the control period.
  • The demand estimation of sales to IP sets to be based on a methodology which uses feeder-level AMI data.