28. DETERMINATION OF TARIFF BY CENTRAL COMMISSION. -The
Central Commission shall determine by regulations the terms and
conditions for fixation of tariff under Cls. (a), (b) and (c,) of Sec. 13, and in
doing so, shall be guided by the following, namely: -
(a) The generating companies and transmission entities shall adopt
such principles in order that they may earn an adequate return and
at the same time that they do not exploit their dominant position in
the generation, sale of electricity or in the inter-State transmission
of electricity,
(b) The factors which would encourage efficiency, economical use ofthe resources, good performance, optimum investments and other
matters which the Central Commission considers appropriate;
(c) National power plans formulated by the Central Government; and
(d) Such financial principles and their applications contained in Sch.VI
to the Electricity (Supply) Act, 1948 (54 of 1948) as the
Commission considers appropriate.
29. DETERMINATION OF TARRIF BY STATE COMMISSION. -
(1) Notwithstanding anything contained in any other law, the tariff for
intra State transmission of electricity and the tariff for supply of
electricity, grid, wholesale, bulk or retail, as the case may be, in a
State (hereinafter referred to as the “tariff'), shall be subject to the
provisions of this Act and the tariff shall be determined by the State
Commission of that State in accordance with the provisions of this
Act.
(2) The State Commission shall determine by regulations the terms
and conditions for the fixation of tariff, and in doing so, shall be
guided by the following, namely: -
(a) The principles and their applications provided in Sees. 46,
57 and 57-A of the Electricity (Supply) Act, 1948 (54 of 1948)
and the Sixth Schedule thereto,
(b) In the case of the Board or its successor entities, the
principles under Sec. 59 of The Electricity (Supply) Act, 1948
(54 of 1948);
(c) That the tariff progressively reflects the cost of supply of
electricity at an adequate and improving level of efficiency;
(d) The factors which would encourage efficiency, economical
use of the resources, good performance, optimum
investments, and other matters which the State Commission
considers appropriate for the purposes of this Act;
(e) The interests of the consumers are safeguarded and at the
same time, the consumers pay for the use of electricity in a
reasonable manner based on the average cost of supply of
energy;
(f) The electricity generation, transmission, distribution and
supply are conducted on commercial principles;
(g) National power plans formulated by the Central Government.
(3) The State Commission, while determining the tariff under this Act,
shall not show undue preference to any consumer of electricity, but
may differentiate according to the consumer's load factor, power
factor, total consumption of energy 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) The holder of each licence and other persons including the Board
or its successor body authorised to transmit, sell, distribute or
supply electricity wholesale, bulk or retail, in the State shall observe
the methodologies and procedures specified by the State
Commission from time to time in calculating the expected revenue
from charges which he is permitted to recover and in determining
tariffs to collect those revenues.
(5) 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 this section, the State Government shall
pay 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 licensee or any other person concerned to
implement the subsidy provided for by the State Government.
(6) Notwithstanding anything contained in Sees. 57-A and 57-B of the
Electricity (Supply) Act, 1948 (54 of 1948) no rating committee shall
be constituted after the date of commencement of this Act and the
Commission shall secure that the licensees comply with the
provisions of their licence regarding the charges for the sale of
electricity both wholesale and retail and for connections and use of
their assets or systems in accordance with the provisions of this
Act.
30. REASONS FOR DEVIATION BY THE COMMISSIONS. -Where the
Commissions depart from factors specified in Cls. (a) to (d) of Sec. 28 and
Cls. (a) to 09 of sub-section (2) of Sec. 29, they shall record the reasons
for such departure in writing.