Section 61 of EA 2003, Electricity Act : Section 61: Tariff Regulations

Explanation using Example

Imagine a scenario where a new hydroelectric power plant is being set up by a generating company in a hilly region. The company approaches the State Electricity Regulatory Commission (SERC) to set a tariff for the electricity it plans to sell. The SERC, in determining the tariff, will refer to Section 61 of the Electricity Act, 2003.

Using the principles laid out in the Act, the SERC will ensure that the tariff reflects the cost of generating hydroelectricity and incentivizes the use of renewable energy sources. They will also consider how the tariff can promote efficiency and performance of the power plant, ensure that consumers are charged a reasonable price for electricity, and that the cost reflects the economic use of resources without burdening consumers with excessive cross-subsidies.

In this case, the SERC might set a tariff that encourages the hydroelectric plant to operate efficiently and at the same time, is fair to consumers. They might also establish a multi-year tariff plan to provide stability to both the power plant and the consumers in the long term.