Mandatory annual revision of electricity tariffs on the cards

THE UNION POWER ministry on Wednesday released the draft National Electricity Policy (NEP) 2026, proposing an index-linked annual revision of electricity tariffs in cases where state electricity regulatory commissions (SERCs) fail to revise tariffs on time.

- SAURAV ANAND

At present, power tariffs are fixed by regulators based on tariff petitions filed by electricity discoms.

The proposal is significant as power tariffs have not been revised regularly in several states despite repeated emphasis by the Centre on cost-reflective tariffs to reduce discom losses. The average tariff for residential electricity consumption in the country is around %6 per unit, while industrial consumers pay about %10.

Speaking at an event, Union Power Minister Manohar Lal urged discoms to move towards cost-reflective tariffs and asked utilities not to commit free power supply unless state governments release subsidies in advance.