Home / Industry / Energy /  Govt gets cracking on regulatory assets

NEW DELHI :

The Union power ministry has directed state electricity regulatory commissions (SERCs) that they must wind up the process of recovering dues owed to state power distribution companies (discoms) by government departments.

Each state and Union territory has an electricity regulatory commission, and they class these dues as “regulatory assets".

In a letter dated 11 November to SERCs and the joint electricity regulatory commission (JERC), the ministry sought the current status of existing dues, and wanted the commissions to submit their plan for the “liquidation" of these dues within a month. The SERCs class these dues as regulatory assets when they are long overdue, and recoup them by charging consumers higher tariffs in the future.

The Centre also emphasized that state regulatory commissions should not approve any more dues as regulatory assets.

“For the financial viability of the distribution licensees and the whole power sector, it is essential that the regulatory assets are liquidated at the earliest. It is requested that the latest status of regulatory assets and the plan for liquidation of the same may be submitted to this ministry within 30 days," it said.

“It is observed that large regulatory assets have been created by some commissions, without specifying the mandatory trajectory for recovery of such regulatory assets. This is in contravention of the law," the ministry said.

The advisory comes amid efforts by the Centre to strengthen the financial condition of discoms and power generation companies and push towards clearance of discom dues. Queries sent to the ministry of power remained unanswered till press time.

ABOUT THE AUTHOR

Rituraj Baruah

Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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