Frequently asked questions related to tariff
What is the adequate value for the electricity tariff?
Ans: Tariff must be sufficient to cover the costs for providing a reliable and quality energy supply and ensuring a financially viable power sector to attract necessary investments for the expansion of capacity.
“Tariff Determination Process involves participation of the General Public”. This statement is ‘True’ or ‘False’. If true, then at what stage participation takes place?
Ans: True. Post submission of Petition by the Utility and Technical Validation, Public Notice is issued confirming the date of Public Hearing and comments are invited from Public. Replies need to be provided by the Utility within the time frame provided by MERC. The Public Hearing is then conducted.
What return does the Utility earn in the Regulated Electricity Business?
Ans: Generation Business, Transmission Business and Distribution Wires Business is entitled to earn 15.5% return on the equity (RoE) at the beginning of the Year and 15.5% return on the 50% of the Equity added during the year.

Retail Supply Business is entitled to earn 17.5% return on the Equity (RoE) at the beginning of the Year and 17.5% return on the 50% of the Equity added during the year.
“Multi Year Tariff” Principle involves submission of data for how many Years?
Ans: 4 Years, as per MERC (Multi Year Tariff) Regulations, 2015
Whether an Order passed by the Regulatory Authority can be “Reviewed” or “Appealed” against? If yes, then to whom?
Ans: Review can be made to MERC and appeal can be made to Appellate Tribunal for Electricity (ATE) and further to Supreme Court (SC).
What is the terminology used for reconciling the ‘Forecasted’ data submitted to the Regulatory Authority and the ‘Actual’ data submitted?
Ans: Truing Up.
Does the Customer stand to gain from the efficient performance of the Utility and how?
Ans: Yes. MERC MYT Regulations, 2015 speaks about the sharing methodology on account of Controllable Factors and Uncontrollable Factors.
2/3rd of gains on account of Controllable Factors will be passed on to customers as rebate in Tariff and balance shall be retained by the Generating Company or Licensee.
1/3rd of loss on account of Controllable Factors will be passed on to customers as additional charge in Tariff and balance shall be absorbed by the Generating Company or Licensee.
Gains on account of Uncontrollable factors will be passed on to the customers entirely.
Mention at least 2 items that form part of Controllable Factors and Uncontrollable Factors?
Ans: Controllable Factors:
Operation & Maintenance expenses, Technical and commercial losses, Interest and Finance charges, Performance parameters.
Uncontrollable Factors:
Sales, Power Purchase Cost, Change in Law, Force Majeure events.
What is the Concept of FAC?
Ans: FAC stands for Fuel Adjustment Cost. Any variation in the fuel cost when compared to the approved cost by MERC can be recovered through the mechanism of FAC.
How many Utilities are operating in Maharashtra as a “Distribution Licensee”?
Ans: Four,
(i) Reliance Infrastructure Limited (RInfra),
(ii) Tata Power Company Limited (TPCL)
(iii) Brihanmumbai Electric Supply and Transport Undertaking (BEST) and
(iv) Maharashtra State Electricity Distribution Company Limited (MSEDCL).
What are Regulatory Assets?
Ans: Regulatory Assets are various costs incurred by the distribution licensee and duly approved by the Regulatory Commission, but deferred for recovery from consumers to avoid tariff shock to consumers.