The Jharkhand State Electricity Regulatory Commission (JSERC) has issued the Draft Transmission Tariff Regulations, 2025, which will apply from April 1, 2026, to March 31, 2031. These regulations are designed to guide the determination of transmission tariffs in the state of Jharkhand and promote competition, efficiency, optimal use of resources, and investment in the transmission sector. The new draft supersedes previous regulations from 2007, 2010, 2015, and 2020. However, these earlier regulations will still govern matters related to the period up to March 31, 2026.

The regulations apply to all intra-state transmission licensees operating under a cost-based or Aggregate Revenue Requirement (ARR)-based tariff model. Projects that have undergone tariff-based competitive bidding are excluded from this regulation. These regulations outline definitions for key terms such as ARR, capital cost, control period, transmission system availability, long- and short-term transmission customers, and others, which form the basis for calculating tariffs.

The MYT (Multi-Year Tariff) framework will begin from the financial year 2026-27 and last till 2030-31. Transmission licensees are required to submit MYT applications along with their business plans, capital investment plans, and detailed ARR projections for each year of the control period. These submissions must include past audited financials from FY 2020-21 to FY 2024-25 and projections for the base year FY 2025-26.

The Commission will evaluate performance against targets, classify deviations as controllable or uncontrollable, and apply an incentive and penalty framework accordingly. Transmission licensees are required to share savings from loan refinancing and operations and maintenance with beneficiaries, and they must bear the full burden of losses resulting from underperformance in controllable areas.

The regulations provide a detailed mechanism for truing-up and annual performance review. Any under- or over-recovery in revenue, along with applicable interest, must be adjusted within six months of the tariff order. The APR process will compare actual performance with approved targets and allow necessary adjustments.

The ARR determination will cover various elements, including return on equity, interest on loans and working capital, depreciation, O&M expenses, income tax, lease charges, and deductions for non-tariff income and other business income. The capital cost is a key component, and only costs approved after prudence checks will be allowed. The draft outlines detailed provisions for additional capitalization, both within and beyond the original project scope, as well as for renovation and modernization.

O&M expenses are calculated using a formula based on previous years’ data, inflation indices, and a growth factor. Interest on working capital will be calculated on normative parameters, and income tax is allowed only on the return on equity. The regulations also specify a 70:30 debt-equity ratio for new capital projects.

Annual transmission charges will be recovered from users based on monthly availability. The transmission system must achieve a minimum availability factor of 98% for full cost recovery, and incentives will be given for availability exceeding the threshold. The regulations also allow for late payment surcharges and rebates for early payments.

These regulations aim to ensure that transmission infrastructure in Jharkhand is developed and maintained in a cost-effective and reliable manner while encouraging transparency and accountability in tariff setting.

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