Draft JSERC Tariff Regulations 2025 Propose New Framework For Power Generation In Jharkhand

The Jharkhand State Electricity Regulatory Commission has issued the Draft JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2025, setting out rules for determining tariffs for electricity generation in the state. These regulations, effective from April 1, 2026, to March 31, 2031, will replace earlier tariff regulations and apply to all cases where the Commission determines tariffs under Section 62 of the Electricity Act, except for plants with tariffs discovered through competitive bidding or those based on renewable sources.

The draft outlines definitions, scope, and guiding principles for a Multi-Year Tariff (MYT) framework. Generating companies will need to submit a business plan and capital investment plan for the control period, detailing capacity additions, efficiency measures, financing structure, and operational targets such as plant availability factor, heat rate, and auxiliary consumption. The framework introduces an incentive and penalty system for controllable parameters, sharing financial gains between generators and beneficiaries, while losses from underperformance will not be recoverable through tariffs.

The regulations also address truing-up and annual performance reviews, requiring companies to reconcile approved costs with actual audited figures, refunding or recovering differences with interest. The tariff determination principles cover both existing and new generating stations, with clear rules on capital cost components, prudence checks, additional capitalization, renovation and modernization, and special allowances for plants beyond their useful life. Costs related to emission compliance, environmental clearances, and force majeure events are also addressed.

Tariffs for thermal stations will have two parts: capacity charges, covering fixed costs such as return on equity, interest on loans, depreciation, and O&M expenses, and energy charges, covering primary and secondary fuel costs and reagents. Hydro tariffs will be determined under separate provisions. A normative debt-equity ratio of 70:30 will apply for new projects, while existing projects will follow ratios approved earlier. Return on equity rates are set differently for various plant types, with possible reductions for non-compliance with operational requirements.

The regulations aim to encourage efficiency, optimal investments, and fair cost recovery while ensuring transparency and accountability in tariff setting. They also laid down procedures for approving emergency capital expenditure, handling uncontrollable factors, and adjusting tariffs for changes in law or force majeure. By establishing detailed operational and financial norms, the Commission seeks to balance the interests of generating companies, distribution licensees, and consumers in Jharkhand’s power sector over the next control period.