The Uttar Pradesh Electricity Regulatory Commission (UPERC) has issued the draft Multi-Year Tariff (MYT) Regulations, 2025 for the transmission sector. These new regulations are designed to streamline the tariff determination process for transmission utilities operating within the state. The regulations will come into effect from April 1, 2025, and will remain applicable for five years unless amended or extended earlier.
These regulations aim to bring clarity and structure to the tariff process. They apply to the State Transmission Utility (STU) and all transmission licensees whose tariff is determined under Section 62 of the Electricity Act. In certain situations, these rules also extend to those governed under Section 63, especially in cases where agreements do not define specific timelines.
Every year, the transmission licensees must file a petition detailing the Annual Revenue Requirement (ARR), performance review, and tariff projections. These filings are expected to be submitted by November 30 each year. The State Transmission Utility, currently Uttar Pradesh Power Transmission Corporation Ltd., will file a combined petition until a new entity is assigned these responsibilities.
The MYT framework considers both controllable and uncontrollable factors affecting cost and performance. Controllable factors include variations in capital expenditure, working capital interest, and performance metrics, while uncontrollable ones cover force majeure events, changes in law, and variations in interest rates. Gains or losses due to these factors are shared between the licensee and consumers, with mechanisms in place to reward efficiency or adjust for unavoidable setbacks.
Capital investment by transmission licensees is a key focus. Only investments approved by the Commission can be included in tariff petitions. Expenses related to the replacement or modernization of existing assets must follow specific rules, including depreciation adjustments and financial scrutiny.
Operational and maintenance expenses are broken into employee costs, repair and maintenance, and administrative expenses. These are computed using inflation-based escalation and audited data from the previous years. Any exceptional expenses due to pay revisions or compliance measures must be backed by documentation and reviewed carefully.
Provisions are also made for delays in commercial operations. If a transmission element is ready but the corresponding generation or associated infrastructure is not, specific rules guide who bears the cost of idle infrastructure. This aims to ensure accountability and coordinated project execution.
The Commission will carry out a technical validation before accepting any tariff petition and will invite public suggestions. Orders will be passed within 120 days from the date of petition admission.
Overall, the UPERC MYT Regulations 2025 introduce a more transparent, performance-based approach to transmission tariff setting in Uttar Pradesh, aiming to improve operational efficiency, project execution, and financial discipline among licensees, while safeguarding consumer interests.
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