Regulators' forum takes on govt over power tariffs

Regulatory establishments across sectors have come together to support power sector regulators against the government's draft tariff policy.

The Forum of Indian Regulators (FOIR), a registered society formed by regulators of various sectors, has said the government's tariff policy "intrudes into the regulatory domain" and has prepared a set of guiding principles to be incorporated in the draft.

"The discussion paper has prescribed numbers/norms covering all the terms and conditions of tariff, including project cost, return on equity, debt-equity ratio, incentives, depreciation, level of availability for recovering of fixed charges, computation of surcharge for cross-subsidy in open access etc, leaving nothing for the regulator to apply his mind," the FOIR said after its general body meeting.

The FOIR has said Section 61 of the Electricity Act 2003 clearly mandates that it is the responsibility of the regulatory commissions to specify the terms and conditions for determination of tariff.

"The FOIR strongly opines that there is a need to distinguish between guiding principles and specification of norms," it said.

The FOIR was formed as a registered society comprising power sector regulators almost three years ago, and more regulators have joined it now.

The latest to join the club is the port sector regulator, the Tariff Authority for Major Ports (Tamp).

The Telecom Regulatory Authority of India (Trai), which has been attending FOIR meetings, is also likely to come on board.

While it will be premature to say that FOIR will take on the government to ensure greater functional autonomy for regulatory bodies, the fact that some of the regulators face the threat of their powers being curbed has caused a lot of consternation.

For instance, the draft power tariff policy floated by the government has ruffled a lot of feathers among state and central power regulators.

The emerging feeling in regulatory circles in the power sector is that the government is overstepping its mandate and trying to take over the regulators' powers.

This is akin to the showdown seen in the telecom sector a few years back, which led to the government ultimately clipping the wings of the Trai.