Rajasthan Regulator Reviews RVUN Finances And Sets Tariff Framework For FY 2026–27

The Rajasthan Electricity Regulatory Commission (RERC) has issued an order regarding the financial “truing up” for the fiscal year 2024–25 and the determination of tariffs for the upcoming fiscal year 2026–27 for Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RVUN), the state-owned power generation company. The regulatory exercise reviewed the company’s actual expenses and operational performance while setting future tariff parameters.

RVUN filed its petition on December 4, 2025, requesting the commission to review its actual costs against earlier projections. The filing covered eight major power stations with a combined installed capacity of about 7,990.5 MW. These include key thermal power plants such as Kota Thermal Power Station, Suratgarh Super Thermal Power Station, and Chhabra Thermal Power Plant, along with the Mahi Hydel Project.

As part of the regulatory process, public notices were issued in major newspapers inviting comments from stakeholders. This step allowed consumer groups and other interested parties to present their views before hearings that took place in early 2026.

A major part of the discussion focused on “additional capitalization,” which refers to investments made to upgrade or improve power plant infrastructure after the initial project construction. Several stakeholders questioned some of RVUN’s claims, including expenses related to office equipment and furniture. They argued that such items should not be categorized as capital expenditure. RVUN, however, maintained that these purchases were necessary for maintaining efficient plant operations and administrative functions.

Operational performance of certain power plants also came under scrutiny during the proceedings. Stakeholders raised concerns that some stations were not achieving the “normative” availability levels set by regulators. RVUN explained that lower performance at stations such as Suratgarh and Kalisindh was largely due to technical problems. These included boiler tube leakages and deterioration of equipment, which the company said was partly caused by extended “box-up” periods when the plants were shut down due to low electricity demand.

Fuel supply and cost issues were another important topic discussed during the hearings. The commission reviewed the higher cost of coal being used by the generator. Stakeholders noted that although RVUN has been allotted certain coal blocks, the company has frequently relied on “Bridge Linkage” coal sourced from alternative suppliers. This type of coal supply arrangement can be significantly more expensive, sometimes costing nearly 40 percent more than regular long-term coal supplies.

The commission also examined the company’s spending on safety and social initiatives. According to RVUN, around Rs. 3.22 million was spent on safety measures across its power plants during the period under review. The company also defended its Corporate Social Responsibility spending, stating that such activities are mandatory under the Companies Act and are important for maintaining environmental clearances and community support around its projects.

The proceedings also highlighted the financial pressure currently faced by the generator. RVUN informed the commission that a government policy decision related to the reversal of Late Payment Surcharges and Return on Equity significantly affected its revenue. The company said this resulted in a major loss of assured income, leading to financial stress and delays in depositing funds meant for employee terminal benefits such as pensions and gratuities.

Despite these challenges, RVUN indicated that it is planning future expansion through joint ventures in both thermal and renewable energy projects. However, many of these projects are still at early stages due to regulatory approvals and coal linkage issues.