61. Tariff regulations.—The Appropriate Commission shall, subject to the provisions of this Act,
specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the
following, namely:—
(a) the principles and methodologies specified by the Central Commission for determination of
the tariff applicable to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of electricity are conducted on
commercial principles;
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(c) the factors which would encourage competition, efficiency, economical use of the resources,
good performance and optimum investments;
(d) safeguarding of consumers’ interest and at the same time, recovery of the cost of electricity in
a reasonable manner;
(e) the principles rewarding efficiency in performance;
(f) multi year tariff principles;
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[(g) that the tariff progressively reflects the cost of supply of electricity and also reduces
cross-subsidies in the manner specified by the Appropriate Commission;]
(h) the promotion of co-generation and generation of electricity from renewable sources of
energy;
(i) the National Electricity Policy and tariff policy:
Provided that the terms and conditions for determination of tariff under the Electricity (Supply) Act,
1948 (54 of 1948), the Electricity Regulatory Commission Act, 1998 (14 of 1998) and the enactments
specified in the Schedule as they stood immediately before the appointed date, shall continue to apply for
a period of one year or until the terms and conditions for tariff are specified under this section, whichever
is earlier.
62. Determination of tariff.—(1) The Appropriate Commission shall determine the tariff in
accordance with the provisions of this Act for—
(a) supply of electricity by a generating company to a distribution licensee:
Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix
the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an
agreement, entered into between a generating company and a licensee or between licensees, for a
period not exceeding one year to ensure reasonable prices of electricity;
(b) transmission of electricity;
(c) wheeling of electricity;
(d) retail sale of electricity:
Provided that in case of distribution of electricity in the same area by two or more distribution
licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix
only maximum ceiling of tariff for retail sale of electricity.
(2) The Appropriate Commission may require a licensee or a generating company to furnish separate
details, as may be specified in respect of generation, transmission and distribution for determination of
tariff.
(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue
preference to any consumer of electricity but may differentiate according to the consumer's load factor,
power factor, voltage, total consumption of electricity during any specified period or the time at which the
supply is required or the geographical position of any area, the nature of supply and the purpose for which
the supply is required.
(4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any
financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge
formula as may be specified.
1. Subs. by Act 26 of 2007, s. 10, for clause (g) (w.e.f. 15-6-2007).
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(5) The Commission may require a licensee or a generating company to comply with such procedures
as may be specified for calculating the expected revenues from the tariff and charges which he or it is
permitted to recover.
(6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined
under this section, the excess amount shall be recoverable by the person who has paid such price or
charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by
the licensee.
63. Determination of tariff by bidding process. —Notwithstanding anything contained in section
62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through
transparent process of bidding in accordance with the guidelines issued by the Central Government.
64. Procedure for tariff order.—(1) An application for determination of tariff under section 62 shall
be made by a generating company or licensee in such manner and accompanied by such fee, as may be
determined by regulations.
(2) Every applicant shall publish the application, in such abridged form and manner, as may be
specified by the Appropriate Commission.
(3) The Appropriate Commission shall, within one hundred and twenty days from receipt of an
application under sub-section (1) and after considering all suggestions and objections received from the
public,—
(a) issue a tariff order accepting the application with such modifications or such conditions as
may be specified in that order;
(b) reject the application for reasons to be recorded in writing if such application is not in
accordance with the provisions of this Act and the rules and regulations made thereunder or the
provisions of any other law for the time being in force:
Provided that an applicant shall be given a reasonable opportunity of being heard before rejecting his
application.
(4) The Appropriate Commission shall, within seven days of making the order, send a copy of the
order to the Appropriate Government, the Authority, and the concerned licensees and to the person
concerned.
(5) Notwithstanding anything contained in Part X, the tariff for any inter-State supply, transmission or
wheeling of electricity, as the case may be, involving the territories of two States may, upon application
made to it by the parties intending to undertake such supply, transmission or wheeling, be determined
under this section by the State Commission having jurisdiction in respect of the licensee who intends to
distribute electricity and make payment therefor.
(6) A tariff order shall, unless amended or revoked, continue to be in force for such period as may be
specified in the tariff order.
65. Provision of subsidy by State Government.—If the State Government requires the grant of any
subsidy to any consumer or class of consumers in the tariff determined by the State Commission under
section 62, the State Government shall, notwithstanding any direction which may be given under
section 108, pay, in advance and in such manner as may be specified, the amount to compensate the
person affected by the grant of subsidy in the manner the State Commission may direct, as a condition for
the licence or any other person concerned to implement the subsidy provided for by the State
Government:
Provided that no such direction of the State Government shall be operative if the payment is not made
in accordance with the provisions contained in this section and the tariff fixed by the State Commission
shall be applicable from the date of issue of orders by the Commission in this regard.
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66. Development of market.—The Appropriate Commission shall endeavour to promote the
development of a market (including trading) in power in such manner as may be specified and shall be
guided by the National Electricity Policy referred to in section 3 in this regard.