The Central government has asked states to allow their electricity distribution companies to pass on increase in costs to power tariffs, which can later be vetted by regulatory commissions.
Presently, there is no automatic pass through as tariff revisions need approval of the state commissions, which seldom leads to delays.
“It may be changed to provide for automatic pass through in tariff change in costs on account of change-in law or power purchase costs. This will result in less working capital requirements by the discoms, leading to less costs of power for the consumers,” the Union power ministry has written to the states.
