RERC Tightens Financial Oversight On Rajasthan Discoms, Sets Path For 2026-27

The Rajasthan Electricity Regulatory Commission (RERC) has issued a major order reviewing the financial performance of the state’s three power distribution companies—Jaipur (JVVNL), Ajmer (AVVNL), and Jodhpur (JdVVNL)—for the financial year 2024-25, while also outlining plans for 2026-27. The order comes after public hearings held earlier in 2026, where concerns were raised about inefficiencies, rising costs, and the overall financial health of the power distribution sector.

A key part of the order is the “true-up” process for FY 2024-25, where actual financial results are compared with earlier estimates. In the case of Jodhpur Discom, the Commission approved a revenue surplus of ₹413.92 crore. This is a major shift from the company’s earlier claim of a gap of ₹188.46 crore. For Jaipur Discom, although the utility reported a loss of ₹706.49 crore, the Commission reduced the approved gap to ₹408.68 crore. It also noted that such losses would be supported through state government subsidies under existing schemes.

The Commission has taken a strict approach toward improving operational efficiency. It expressed concern over the slow progress in implementing Enterprise Resource Planning (ERP) systems, which are important for better tracking of power purchases and reducing losses. Due to this delay, the regulator decided to withhold ₹50 crore from each of the three Discoms. This move shows increasing pressure on utilities to adopt modern systems and improve transparency.

Power purchase costs were also closely examined. The Commission disallowed around ₹768 crore claimed by Jaipur Discom, stating that the company had relied on costly or unapproved short-term power sources. It stressed that electricity must be procured at the lowest possible cost to protect consumers from unnecessary price increases. The regulator also shifted towards approving “normative” expenses, which are based on standard efficiency levels, instead of accepting higher actual costs reported by the utilities.

For the future, the Commission has estimated a combined Gross Aggregate Revenue Requirement (ARR) of ₹76,754 crore for FY 2026-27. While the Discoms had projected an average supply cost of ₹8.19 per unit, the Commission reduced this to ₹7.42 per unit after adjustments. However, despite these corrections, the sector still faces a large financial burden. The total unfunded gap is expected to reach about ₹41,961 crore by the end of 2026-27, before considering any additional charges.

To manage this situation, the Commission has continued the use of subsidies and regulatory surcharges. The overall approach reflects an effort to balance financial discipline with consumer protection. While Discoms are being pushed to improve efficiency and reduce losses, the regulator is also trying to avoid a sudden increase in electricity tariffs for consumers in Rajasthan.