Gujarat Electricity Regulatory Commission (GERC) published the draft Multi-Year Tariff (MYT) Regulations, 2023 The draft regulations have introduced several changes that enable better operations and accountability of utilities and are aligned with several rules and policies notified by the central and state government.

We particularly welcome and commend the commission for:

  • Providing timelines and guidelines for allocation of assets and cost for the wires and retail business (Regulation 3.3, Annexure V)
  • Conducting detailed analysis for revision of rate of return on equity and specifying utility-wise performance parameters for additional RoE.(Regulation 35)
  • Stipulating technical validation session as part of the tariff determination process (Regulation 25.1)
  • Reduction in return on equity by 0.25% in case of delay in tariff filings by utilities (Regulation 25.11).
  • Providing a clear framework for treatment of subsidies in line with MoP Rules (Regulation 28)
  • Specifying limit DPR schemes and for stipulating limit non-DPR schemes as a 20% of DPR schemes (Regulation 29.15).
  • Requiring submission of a fuel utilisation plan from the generating companies (Regulation 47)
  • Clearly stipulating the threshold for TBCB in the regulations at Rs. 100 and for projects 220 kV and above (Regulation 64.2.1).
  • Mandating use of advanced tools and models for demand forecasting from the second year of the control period (Regulation 107.3).
  • Commissions proposal to develop an online portal for submission, review, approval and monitoring of capital investment schemes. Mandate for online reporting of status of ongoing capex schemes and imposition of penalties in case of non-compliance. (Para 11 of Annexure III)
  • Shifting to RoCE approach for assets commissioned w.e.f. new Control Period, while maintaining the existing assets under the RoE approach (Regulation 35 and 36).

Prayas (Energy Group) has proposed some suggestions to enhance the commission’s progressive initiatives and to prepare for the major changes expected in the sector by 2029. Some of these suggestions include:

  • Having 5 year tariff determination process for DISCOMs and mid-term review rather than annual tariff determination and true-up processes
  • RoE incentives for distribution segment to be linked to improvement in DT failure rate, outages
  • Agricultural demand estimation methodology based on feeder level AMI data to be codified in the regulations
  • Need for regulatory framework in MYT regulations on approval of smart meter rollout plat and cost-benefit assessment and cost sharing with consumers.
  • Incentive for increased availability and PLF in peak hours and high demand seasons
  • GCV consideration in energy charge calculated to be on as billed basis (with necessary adjustments for difference between TMB and EMB).
  • Stipulating frameworks for time of day tariff (ToD) implementation for consumers with greater than 10 kW load by FY27 with seasonal variations in ToD.