APSERC Releases Draft 2025 Fee Regulations to Streamline Electricity Sector Applications and Tariff Filings in Arunachal Pradesh

Introduction

The Arunachal Pradesh State Electricity Regulatory Commission (APSERC) has introduced comprehensive fee reforms through its Draft Fee Regulations, 2025, which will apply across the entire state upon publication in the official State Gazette, replacing the earlier 2011 Fee Regulations¹.

Explanation (Key Points)

• The scope of regulation includes overall tariff structures for all principal electricity sector activities ranging from licensing processes to tariff determination applications, performance reviews, resolution of disputes, and multiple regulatory clearances under the Electricity Act, 2003. The full coverage of tariff structures for all significant electricity sector activities ensures that all regulatory activities have well-defined tariff structures removing uncertainty and favoring transparent regulatory processes in Arunachal Pradesh’s electricity sector.
• Licensing fee arrangements provide for distinct differentiation between various forms of electricity sector licenses under Section 14 of the Act with initial license fees for transmission, distribution, and trading licenses uniformly fixed at ₹5,00,000. The annual charges are a function of the varying complexity and regulatory oversight demands of differing license classes: ₹6,00,000 for transmission licenses, ₹10,00,000 for distribution licenses, and ₹5,00,000 for trading licenses, with the highest annual charges for distribution licenses because of their face-to-consumer responsibilities and extensive regulatory oversight demands.
• Tariff determination applications have advanced capacity-based charges that identify material scale differences between different categories of power generation projects. Traditional fuel-powered plants (with the exception of captive plants) attract charges of ₹6,000 per MW with a minimum charge obligation of ₹30,00,000 that mirrors the sophisticated regulatory examination that has to be undergone by thermal generation plants. Renewable energy installations such as wind and solar enjoy lower charges of ₹6,000 per MW with a minimum of ₹7,50,000, proving the regulatory favor towards clean energy production while ensuring proper cost recovery for regulatory examination efforts.
• Captive hydro plants are accorded preferential fee treatment with a minimum cap of just ₹3,00,000, promoting distributed generation growth and taking into account the generally smaller size and lower regulatory complexity of captive generation plants. This varied treatment facilitates multiple generation technologies while making regulatory fees remain proportional to project size and regulatory oversight needs.
• Distribution and transmission licensee charges include energy throughput computation based on the scale and complexity of operations. Transmission licensees have a minimum of ₹10,00,000 based on 3 paise for every 100 kWh of proposed wheeled energy, considering the technical complexity of operating transmission systems and the importance of transmission infrastructure to grid stability. Distribution licensees have greater minimum fee requirements of ₹15,00,000 based on 6 paise per 100 kWh, representing their direct consumer interface duties, retail market operations, and the intensive regulatory supervision necessary for distribution service quality and dependability.
• Annual Performance Review (APR) petitions under the Multi-Year Tariff mechanism have lower fee structures than in the first tariff determinations, acknowledging lesser regulatory complexity of performance monitoring than of first-time tariff setting. Traditional generating firms pay ₹1,500 per MW with a minimum of ₹10,00,000, whereas renewable ventures have a minimum of ₹3,00,000. The differential pricing is meant to promote regular performance monitoring as well as regulatory compliance and control regulatory expenses on upkeep activities.
• Applications for truing-up under MYT structures retain capacity-based fee levels with individual provisions for various generation types. Traditional generation stations pay ₹3,000 per MW with a minimum of ₹20,00,000, whereas renewable schemes pay a minimum of ₹5,00,000. Distribution licensees pay at least ₹10,00,000, whereas transmission licensees pay a minimum of ₹7,50,000 so that truing-up procedures ensure proper cost recovery while facilitating correct reconciliation of anticipated and actual costs.
• Specialized regulatory processes have specified fee schedules such as ₹25,00,000 for tariff adoption proposals under Section 63 of the Act as an indication of the serious regulatory scrutiny involved in competitive bidding results. Business plan approvals, power purchase agreement examinations, adjudication of disputes, and review petitions have particular fees from ₹10,000 for standalone review petitions to ₹4,00,000 for miscellaneous applications by licensees not included in other fee schedules.
• Payment mechanism modernization accommodates contemporary transaction methods while maintaining appropriate controls. The regulations accept various bank instruments including demand draft, RTGS, NEFT, IMPS, or cash payments up to ₹1,000 only8. Form-I submission requirements within three days of payment ensure proper documentation and tracking of fee payments, supporting efficient regulatory administration and financial management.
• Fee differentiation between licensees and individuals identifies the difference in capacity and resources among various market participants. Review petitions by individuals have 50% of the initial application fee, and miscellaneous applications are ₹4,00,000 for licensees and ₹10,000 for individuals. The differentiation allows regulatory access to all stakeholders while preserving an appropriate cost recovery for regulatory services.
• State Load Dispatch Centre (SLDC) applications have uniform charges of ₹5,00,000, which will be commensurate with the specialized services of system operation and the vital role load dispatch plays in ensuring grid stability and reliability. The scope of regulation includes overall tariff structures for all principal electricity sector activities ranging from licensing processes to tariff determination applications, performance reviews, resolution of disputes, and multiple regulatory clearances under the Electricity Act, 2003.
• Licensing fee arrangements provide for distinct differentiation between various forms of electricity sector licenses under Section 14 of the Act with initial license fees for transmission, distribution, and trading licenses uniformly fixed at ₹5,00,000. The annual charges are a function of the varying complexity and regulatory oversight demands of differing license classes: ₹6,00,000 for transmission licenses, ₹10,00,000 for distribution licenses, and ₹5,00,000 for trading licenses, with the highest annual charges for distribution licenses because of their face-to-consumer responsibilities and extensive regulatory oversight demands.
• Tariff determination applications have advanced capacity-based charges that identify material scale differences between different categories of power generation projects. Traditional fuel-powered plants (with the exception of captive plants) attract charges of ₹6,000 per MW with a minimum charge obligation of ₹30,00,000 that mirrors the sophisticated regulatory examination that has to be undergone by thermal generation plants. Renewable energy installations such as wind and solar enjoy lower charges of ₹6,000 per MW with a minimum of ₹7,50,000, proving the regulatory favor towards clean energy production while ensuring proper cost recovery for regulatory examination efforts.
• Captive hydro plants are accorded preferential fee treatment with a minimum cap of just ₹3,00,000, promoting distributed generation growth and taking into account the generally smaller size and lower regulatory complexity of captive generation plants.
• Distribution and transmission licensee charges include energy throughput computation based on the scale and complexity of operations. Transmission licensees have a minimum of ₹10,00,000 based on 3 paise for every 100 kWh of proposed wheeled energy, considering the technical complexity of operating transmission systems and the importance of transmission infrastructure to grid stability. Distribution licensees have greater minimum fee requirements of ₹15,00,000 based on 6 paise per 100 kWh, representing their direct consumer interface duties, retail market operations, and the intensive regulatory supervision necessary for distribution service quality and dependability.
• Annual Performance Review (APR) petitions under the Multi-Year Tariff mechanism have lower fee structures than in the first tariff determinations, acknowledging lesser regulatory complexity of performance monitoring than of first-time tariff setting. Traditional generating firms pay ₹1,500 per MW with a minimum of ₹10,00,000, whereas renewable ventures have a minimum of ₹3,00,000. The differential pricing is meant to promote regular performance monitoring as well as regulatory compliance and control regulatory expenses on upkeep activities.
• Applications for truing-up under MYT structures retain capacity-based fee levels with individual provisions for various generation types. Traditional generation stations pay ₹3,000 per MW with a minimum of ₹20,00,000, whereas renewable schemes pay a minimum of ₹5,00,000. Distribution licensees pay at least ₹10,00,000, whereas transmission licensees pay a minimum of ₹7,50,000 so that truing-up procedures ensure proper cost recovery.
• Specialized regulatory processes have specified fee schedules such as ₹25,00,000 for tariff adoption proposals under Section 63 of the Act as an indication of the serious regulatory scrutiny involved in competitive bidding results. Business plan approvals, power purchase agreement examinations, adjudication of disputes, and review petitions have particular fees from ₹10,000 for standalone review petitions to ₹4,00,000 for miscellaneous applications by licensees not included in other fee schedules.
• Payment mechanism modernization accommodates contemporary transaction methods while maintaining appropriate controls. The regulations accept various bank instruments including demand draft, RTGS, NEFT, IMPS, or cash payments up to ₹1,000 only. Form-I submission requirements within three days of payment ensure proper documentation and tracking of fee payments, supporting efficient regulatory administration and financial management.
• Fee differentiation between licensees and individuals identifies the difference in capacity and resources among various market participants. Review petitions by individuals have 50% of the initial application fee, and miscellaneous applications are ₹4,00,000 for licensees and ₹10,000 for individuals.
• State Load Dispatch Centre (SLDC) applications have uniform charges of ₹5,00,000, which will be commensurate with the specialized services of system operation and the vital role load dispatch plays in ensuring grid stability and reliability. The uniform approach makes fee calculation easy while allowing for effective cost recovery for specialized regulatory monitoring of system operation activities.

Conclusion

The capacity-based and energy-throughput-based fee structures provide equitable treatment based on project scale and operational complexity. The regulations encourage renewable energy development through preferential fee rates. The modernized payment mechanisms and differentiated fee structures for various market participants ensure that regulatory services remain accessible.