GERC Approves Revised Tariff And ARR For GIFT Power Company, Highlights Efficiency And Consumer Balance

The Gujarat Electricity Regulatory Commission (GERC) has issued a key Tariff Order on July 21, 2025, for GIFT Power Company Limited (GIFT PCL), a distribution licensee operating within the 886-acre GIFT City area. This order was passed following a remitted matter by the Appellate Tribunal for Electricity (APTEL). It covers the true-up for FY 2019-20 and the determination of Aggregate Revenue Requirement (ARR) and tariff for FY 2021-22. GIFT PCL, a subsidiary of Gujarat International Finance Tec-City Company Limited, serves both the Special Economic Zone (SEZ) and Domestic Tariff Area (DTA) within GIFT City.

The petition was filed by GIFT PCL on February 1, 2021. The company requested approval for the actual expenses and revenue of FY 2019-20 and the ARR and tariff for FY 2021-22 as per the GERC (Multi-Year Tariff) Regulations, 2016. GERC carried out a detailed analysis of all components of ARR, considering both controllable and uncontrollable factors.

In FY 2019-20, actual energy sales were 21.53 Million Units (MUs), lower than the approved 32.01 MUs. GIFT PCL attributed this to reduced customer demand and an economic slowdown. GERC approved the actual figures. The distribution loss for the year was 3.21%, better than the previously approved 5.50%. GERC accepted the lower loss, noting that GIFT City’s power network is still under development. The total approved energy requirement for the year was 22.24 MUs.

The power purchase cost for FY 2019-20 was approved at ₹9.98 Crore for 22.24 MUs, translating to ₹4.49/kWh, which was higher than the earlier approved rate of ₹4.25/kWh. The rise in cost was due to factors beyond GIFT PCL’s control, including the termination of a power purchase agreement with UGVCL, which led to high fixed charges. GERC also reclassified some of the PTC charges as O&M expenses, not power purchase costs, and asked GIFT PCL to plan its procurement more efficiently in the future.

For FY 2021-22, energy sales were projected at 29.64 MUs, and distribution losses remained at 3.21%. GERC approved the total ARR at ₹18.82 Crore, including expenses for power purchase, O&M, depreciation, finance charges, and return on equity. GIFT PCL’s plan to set up a 1 MW solar plant was rejected due to lack of clarity on its economic feasibility.

GERC issued several directives, including preparing a roadmap for loss reduction, planning power purchases for the next five years, optimizing O&M costs, and exploring EV charging infrastructure. GIFT PCL was also asked to implement smart pre-paid meters and study the feasibility of a green tariff. The Commission noted that the company had already reduced its interest rate to 7% by refinancing loans.

The final approved revenue gap for FY 2019-20 was just ₹0.04 Crore, much lower than GIFT PCL’s claim of ₹12.85 Crore. For FY 2021-22, a surplus of ₹3.31 Crore was projected. FPPPA charges for consumers will be based on UGVCL’s rates, with a base charge of ₹1.80/kWh. The order aims to promote transparency, efficiency, and fair pricing for GIFT PCL and its consumers.