Amendment status not verified — confirm the current text below against the official source.
The salient features of the -said Ordinance are as follows: - (a) It provides for the establishment of a Central Electricity Regulatory Commission at the Central level and State Electricity Commissions at the State levels-, (b) The main functions of CERC are: - (i) To regulate the tariff of generating companies owned or controlled by the Central Government; (ii) To regulate inter-State transmission including tariff of the transmission utilities; (iii) To regulate inter-State sale of power; (iv) To aid and advise the Central Government in the formulation of tariff policy. (c) The main functions of the SERC, to start with, shall be: - (i) To determine the tariff for electricity, wholesale, bulk, grid and retail; (ii) To determine the tariff payable for use of the transmission facilities; (iii) To regulate power purchase the procurement process of the transmission utilities; and (iv) Subsequently, as and when each State Government notifies, other regulatory functions could also be assigned to SERCS. (d) It also aims at improving the financial health of the State Electricity Boards (SEBS) which are loosing heavily on account of irrational tariffs and lack of budgetary support from the State Governments as a result of which, the SEBs have become incapable of even proper maintenance, leave alone purposive investment. Further, the lack of creditworthiness of SEBs has been a deterrent in attracting investment both from the public and private sectors. Hence, it is made mandatory for State Commissions to fix tariff in a manner that none of the consumers or class of consumers shall be charged less than fifty per cent. of the average cost of supply, it enables the State Governments to exercise the option of providing subsidies to weaker sections on condition that the state Governments through a subsidy compensate the SEBS. As regards the agriculture sector, it provides that if the State Commission considers it necessary it may allow the consumers in the agricultural sector to be charged less than fifty per cent, for a maximum period of three years from the date of commencement of the Ordinance. It also empowers the State Government to reduce the tariff further but in that case it shall compensate the SEBs or its successor utility, the different between the tariff fixed by the State Commission and the tariff proposed by the State Government by providing budgetary allocations. Therefore, it enables the State Governments to fix any tariff for agriculture and other sectors provided it gives subsidy to State Electricity Boards to meet the loss.