Jharkhand Commission Establishes New Multi-Year Tariff Regulations for Electricity Generation

The Jharkhand State Electricity Regulatory Commission (JSERC) issued the Jharkhand State Electricity Regulatory Commission (Terms and Conditions for Determination of Generation Tariff) Regulations, 2025, through a notification dated October 15, 2025. These comprehensive regulations, published in the Jharkhand Gazette Extraordinary, supersede previous frameworks including the JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations of 2020, 2015, 2010, 2007, and the JSERC (Terms and Conditions for determination of Thermal Generation Tariff) Regulations, 2004, along with all their amendments. The new regulations are set to come into force for the period from April 01, 2026, to March 31, 2031, following their publication in the Official Gazette of the Government of Jharkhand. They apply to all cases where the Commission determines the tariff for a generating station or unit, except for stations whose tariff is discovered through competitive bidding or those based on renewable energy sources. The regulations introduce a detailed Multi-Year Tariff (MYT) framework, outlining procedures for capital cost determination, additional capitalization, depreciation, operation and maintenance (O&M) expenses, and the calculation of capacity and energy charges. They also establish an incentive and penalty framework for controllable performance parameters, along with mechanisms for truing-up and annual performance reviews. These provisions directly affect Generating Companies, Distribution Licensees (as beneficiaries), and the State Load Despatch Centre (SLDC) within the State of Jharkhand.

The legislative intent behind these regulations is rooted in the powers conferred by sub-section (1) of Section 181 and clauses (zd), (ze), and (zf) of sub-section (2) of Section 181, read with Sections 61, 62, and 86 of the Electricity Act, 2003. The Commission stated that the legislation provided: “...to encourage competition, efficiency, economical use of resources, good performance and optimum investments by the Generating Company within the State of Jharkhand and for determination of Multi-Year Tariff to be recovered by the Generating Company for the prudent expenses incurred for generating electricity.” This framework aims to address previous statutory limitations by providing a stable and predictable regulatory environment for a five-year control period. It seeks to promote efficiency and optimal investment by setting clear performance targets and linking financial outcomes to operational performance through incentives and penalties. For instance, financial losses due to underperformance in controllable parameters (such as Station Heat Rate or Auxiliary Energy Consumption) will not be recoverable through tariff, while financial gains will be shared between the Generating Company and beneficiaries. The regulations also detail the treatment of capital costs for both new and existing projects, including provisions for additional capitalization due to 'Change in Law' events or 'Force Majeure' conditions, and for compliance with revised emission standards. Specific norms of operation are prescribed for various thermal and hydro power stations, including Jojobera, Adhunik Power & Natural Resources Limited, Inland Power Limited, Tenughat Thermal Power Station, and Sikidiri Hydel Power Station, with a mechanism for the Commission to determine norms for unlisted stations on a case-by-case basis. Enforcement mechanisms include annual performance reviews and truing-up processes, with specific timelines for filing petitions. Non-compliance with directions from the State Load Despatch Centre may lead to penalties under Section 146 of the Electricity Act, 2003.

Keywords: Jharkhand Electricity, Tariff Regulations, Multi-Year Tariff, Generation Tariff, JSERC, Electricity Act 2003, Power Generation, Energy Policy, Regulatory Commission

Geo Tags: India, Jharkhand District: Not Applicable