Tripura Regulatory Commission Announces ₹0.75/kWh Green Tariff and Moderate Renewable Tariff Hike

Introduction

The Tripura Electricity Regulatory Commission (TERC) has recently issued its tariff order for the fiscal year 2024-25, introducing several key changes aimed at promoting renewable energy, improving the quality of power supply, and ensuring financial discipline within the state’s power sector.[1] The order, which became effective from August 1, 2024, highlights a modest average tariff hike, the introduction of a green tariff to support renewable energy consumption, and various measures to enhance the operational efficiency of the Tripura State Electricity Corporation Limited (TSECL).

Explanation

The TERC’s tariff order for FY 2024-25 represents a significant regulatory intervention to balance the need for financial viability in the state’s power sector with the broader goal of promoting sustainable energy and protecting consumer interests. The Commission has approved an average tariff hike of 7.15%, similar to the previous fiscal year, which is notably moderate considering the higher fuel costs and increased power purchase expenses. The modest hike is also a result of the Commission’s stringent prudence check on TSECL’s petition, where only ₹10.77 crore of the ₹962.87 crore claimed by TSECL was approved. This reflects TERC’s commitment to a rational and consumer-friendly tariff structure.

One of the standout features of the new tariff order is the introduction of a ₹0.75/kWh green tariff. This tariff is designed to promote the use of renewable energy in Tripura by allowing consumers the option to pay a premium for green power. This move is in line with the mandates of the Electricity Act, 2003, and directives from the Ministry of Power (MoP) to encourage the consumption of renewable energy. The green tariff is expected to foster the growth of renewable energy projects in the state and help Tripura move towards a more sustainable energy future.

In addition to the green tariff, the TERC has also announced a modest increase in energy charges for different consumer categories. Domestic (rural) consumers will see a hike of approximately ₹0.25 per unit, while other consumer categories will experience an increase of less than ₹0.75 per unit. These rates remain competitive compared to tariffs in other states across India. The tariff hike has been necessitated by rising fuel costs, particularly due to the increase in gas prices and the cost of power purchased from external sources.

TERC’s order also emphasizes the importance of improving the quality of power supply. TSECL has been directed to adhere strictly to the quality of supply standards and to introduce a call-back facility for consumers who are unable to connect through the existing complaint helpline. This measure is aimed at enhancing consumer satisfaction and ensuring that complaints are addressed promptly. Additionally, to promote digital payments, the Commission has introduced an additional rebate of 1% for consumers who pay their bills online within five working days of bill generation.

The TERC has also directed TSECL to optimize its operational costs by sourcing cheaper power and reducing transmission and distribution (T&D) losses. These measures are critical for improving the financial and technical discipline within TSECL and ensuring the long-term sustainability of the state’s power sector.

Another significant aspect of the tariff order is the conditional subsidy framework. The TERC has determined the tariff considering a subsidy from the Government of Tripura, with a clear provision that the subsidy must be paid in advance on a monthly basis. In the event of non-payment of the subsidy for two consecutive months, TSECL has been authorized to recover the full tariff from consumers, ensuring the financial stability of the utility.

Conclusion

The TERC’s tariff order for FY 2024-25 reflects a balanced approach to managing the state’s power sector. By introducing a green tariff, implementing a moderate tariff hike, and emphasizing the improvement of service quality, the Commission aims to promote renewable energy, ensure consumer satisfaction, and maintain the financial health of TSECL. These measures, coupled with the Commission’s strict oversight on cost management and operational efficiency, are expected to drive Tripura’s power sector towards a more sustainable and consumer-centric future.

[1] https://terc.tripura.gov.in/sites/default/files/Press%20Release%20-%20Final%20Tariff%20Order.pdf