Power Distribution Tariffs in India 2019 - Gauging Impacts of New Tariff Norms

Though no change in consumption pattern is anticipated revenue contribution for discoms is to alter due to new 2019-24 tariff norms.

The languishing power distribution segment has been the central focus for Government & regulators both as this shall benefit the end consumers coupled with power generation companies. Hence, 2019-24 norms designed to aid a balance between gencos and end consumers.

There have been considerable improvements in the structure of power tariff in the country, since the launch of EA 2003 followed by NTP 2006. Despite these improvements the legacy issues of the discoms do come back to haunt their account books and even multiple bail out packages, the dedicated scheme of UDAY and other incentives majority of the discoms continue to get over the legacy issues and do not have a seamless revenue flow. Taking cognizance of the situation and suggestions up-hand by various stakeholders Government was keen on revisions of the tariff policy coupled with changes of which many are a “first” in the upcoming CERC Tariff norms for 2019-24 as the control period. The chief focus is to sway away from the legacy issues and turn the discoms more profitable apart from keeping the interests of both the power developers and end consumers intact.

India has continuously shown an increasing trend for the average cost of supply and average revenue for the discoms yet the collection of past arrears and undue burden of cross-subsidies have jeopardized the sustenance call and have put across pressures on their financials. However, despite best efforts from subsequent Government, it was difficult for the discoms to turn the tide and become profitable leading to an expedition of ways and means which can prune up their losses. Therefore, following the quest of discoms coupled with market sentiments certain decisive moves are being adopted by the central commission and have laid down in the draft referendum for tariff norms 2019-24.

Further, this clearly would signify the average tariff for the particular discom across the designated sets of consumer i.e. Industrial, Commercial and Domestic will most likely decrease as compared to the previous regulation. Although, the computation of availability on a quarterly basis shall be challenging for the quarterly period but shall definitely bring in the reduction in the quantum of short-term procurements meaning greater savings for the distribution utilities. However, the enhanced availability of power for discoms might not lead to the lowering of tariffs by the tune it should purely for the demand being on the higher side.

Business Case for Change in Power Distribution Tariffs in India

• New CERC draft tariff regulations for control period 2019-2024
  
• Thrust given to add power generation capacity (Renewable and Thermal): A move to create “one market in power”
  
• Long overdue reforms of Discoms in terms of adequate and rational tariff structure may get addressed by these norms
  
• Energizing the development of Renewable Sector
  
• The new paradigm of surplus power sets the stage for new reforms
  
• Move to rationalise power tariff structure
  
• Push to “Make in India” initiative
  
• Increased quantum for Open Access in India
  
• Reduction in the short-term power procurement
  

USPs associated with the report are as follows:

• First-hand sector knowledge and inputs
  
• Primary research inputs from F2F interviews with domain experts
  
• Experts insights and market reviews are taken into consideration
  
• Validated data and analysis
  
• Opportunity mapping and market sizing
  
• Germinates from minds that think fresh to evolve pathfinding guide for all stakeholders through quality information and analysis
  
• Free query handling and analyst support for three months from the date of report procurement
  

Key Highlights

• Impact analysis of CERC tariff regulations 2019-2024 on power distribution tariffs in India
  
• Consumer category wise tariff schedule for FY 2019-20
  
• Consumer profiling as per connected load
  
• Consumer category wise revenue contribution
  
• Consumer category wise revenue contribution
  
• Net Aggregate Revenue Requirement (ARR) of Distribution Utilities
  
• Revenue Gaps/Surplus for Distribution Utilities
  

Report Insights

• Detailed analysis of CERC Tariff Regulations for 2019-2024 (Final Regulations, expected in February 2019) and its impacts on Power Distribution Tariffs across various consumer categories in India
  
• Distribution Utility wise tariff schedule in India applicable for FY 2019-20
  
• Adaptability indices for solar rooftop for discoms
  
• Level of OA & short-term procurement of power for each discom forecasted
  
• Examining consumer category wise distribution tariff across each state and distribution utility for FY 2019-20
  
• Detailed analysis of various components of tariff for each distribution utility and likely impact of new norms
  
• Old vs New Tariff Comparison (Last 1 year regulatory track of the change in applicable surcharges and duties)
  
• Easy to use Excel and Pdf Format
  

A Must Buy For:

• Power Generating Companies
  
• Power Distribution Utilities
  
• Power Transmission Utilities
  
• Captive/Group Captive Consumers
  
• Independent Power Producers
  
• Bulk Consumers
  
• State Electricity Regulatory Authorities
  
• FIIs/Banks
  
• Industrial Park/SEZs/Steel Plants
  
• Power Project Funding Bodies
  
• Foreign Collaborating Agencies
  
• Utility Solar Power Project Developers
  
• Government & Regulatory Bodies
  
• Research Institutions/Bodies
  
• Funding Bodies/Banks