"The norms are to be determined by the CERC. The policy is in line with the National Common Minimum Programme, which says the regulatory structure will be strengthened, and does not interfere with the regulator's domain," said A K Basu, chairman, CERC. The tariff order for 2004-09, which has already been issued, was by and large in line with the policy, he said.
The power ministry had earlier proposed to include norms for setting tariffs in the draft policy, but the regulator went ahead and issued a detailed policy last year.
The document, which has been circulated for comments to various states, also calls for a review of the duties on electricity in order to bring them to a reasonable level. The draft policy is, however, in favour of time-bound recovery of uncontrollable costs, such as fuel, power purchase and taxes, through tariff hikes.
"In some cases, duties on the consumption of electricity are linked to sources of generation (like captive generation) and they are much higher compared with those on the same category of consumers who draw power from grid," it said.
On tariffs, the draft policy is in favour of quick recovery of uncontrolled costs. It says the focus should be on the regulation of output, and not input, costs.
"Uncontrolled costs should be preferably recovered within the financial year itself (typically on a quarterly basis) to ensure that future consumers are not burdened with past costs," it adds.
Arguing in favour of direct subsidies to needy consumers, rather than cross-subsidisation, the draft policy says state governments have the option of raising resources by levying duties on electricity and providing a maximum subsidy of 50 per cent of the cost of supply to consumers below the poverty line and consuming below a specified level.
It calls for confining cross-subsidies
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