Regulated tariffs are here to stay

They are stable and power plants as well as consumers stand to gain from them

With a pan-India thrust on electrification, the nation has become flush with power generation capacity in the last six to eight months. This was further aided by the generation sector delicensing under the Electricity Act, 2003. The spurt in merchant market prices between 2008 and 2011 led power generation players to enter the market. 

India’s supply generation glut was exacerbated due to stunted demand, which brought down prices. Merchant market prices as low as Rs 1.50/Kwh — even lower than the variable cost of fuels — only compromised generation companies and their investors. As a result, power generation companies have