The Union Cabinet approved the ´National Tariff Policy for Electricity´ aimed at tightening regulations for setting power rates and promotion of clean energy. The regulations tighten regulations for setting power tariffs by asking electricity regulators to ´necessarily´ be guided by the new policy while framing regulations under section 61 of the Act. Earlier, the state regulators would not abide by regulations and twist it according to their requirement, said a former CERC member. Major additions to the objective of the policy are promotion of renewable generation sources and aim to create more competition, efficiency in operations and improvement in quality of power supply.
One of the recommendations in the policy to incentivise the distribution companies to procure power from renewable sources of energy, the central government may notify, from time to time, an appropriate bid-based tariff framework for renewable energy. The policy also allows increase in fuel cost on account of import to be included in the tariff structure. power