TERC Approves ₹12.75 Billion Tariff Recovery for TSECL: Focus on Revenue Gap Trimming and Surcharge Avoidance

The Tripura Electricity Regulatory Commission (TERC) issued a tariff order on May 4, 2026, for the financial year (FY) 2026–27. The Commission approved a tariff recovery amount of ₹12.75 billion (~$133.27 million) for the Tripura State Electricity Corporation Limited (TSECL), with the revised tariffs becoming effective on May 1, 2026. This determination balances utility financial sustainability with consumer protection by avoiding tariff shock.

Financial Breakdown: Requested vs. Approved Revenue

TSECL submitted a proposal to recover a cumulative revenue gap of ₹17.09 billion. The Commission determined that full recovery of the standalone Aggregate Revenue Requirement (ARR), which reached ₹21.64 billion for FY 2026–27, would have necessitated a 43% tariff increase. TERC rejected this proposal and approved the following figures:

The Phased Recovery Mechanism and Surcharge Rejection

To manage the revenue gap, the Commission applied a phased recovery strategy:

• Phased Recovery: TERC approved the recovery of one-fifth of the true-up gap for FY 2023–24 and one-third for FY 2024–25 within the current ARR.
• Rejection of Surcharge: The Commission rejected TSECL’s proposal for a “One-Time Regulatory Surcharge” or a separate “Regulatory Surcharge.” TERC directed that costs be recovered through rationalized base tariffs.
• Carrying Costs: The Commission approved ₹1.50 billion in carrying costs within the ARR.

Impact on Consumer Tariffs

The Commission determined the Average Cost of Supply (ACoS) at ₹8.90/kWh, compared to the ₹18.13/kWh claimed by TSECL.

• Energy Charge Adjustments:
  • Domestic (Up to 150 units): Increase of ₹0.15/kWh.
  • Domestic (>150 units), Irrigation, Public Water/Lighting: Increase of ₹0.20/kWh.
  • Other Categories: Increase of ₹0.35/kWh.
• Time of Day (ToD) Tariff: The Commission directed that ToD billing is mandatory for most consumer categories, excluding small domestic and irrigation users.
  • Solar Hours (9 AM–5 PM): Charged at 80% of the normal tariff.
  • Peak Hours (5 PM–10 PM): Charged at higher rates.
• Rebates and Green Tariff: The “Green Tariff” is retained at ₹0.75/kWh. Existing 10% rebates for Homestays, IT/ITES, and Women Self-Help Groups (SHGs) continue.

Operational Parameters and Distribution Costs

The Commission determined specific distribution business costs and targets for FY 2026–27:

• Power Purchase and Transmission: Approved power purchase costs are ₹16.18 billion. Interstate transmission charges are ₹1.14 billion, and intrastate transmission charges are ₹392.4 million.
• Generation Costs: TSECL’s own generation costs are approved at ₹1.78 billion.
• Distribution Loss: TERC approved a loss target of 18.30% for FY 2026–27. The actual loss recorded in FY 2024–25 was 27.56%.

Regulatory Directives and Compliance Requirements

The Commission issued the following mandatory directives to improve operational efficiency:

• Completion of feeder energy audits within six months.
• Complete financial segregation of generation and transmission businesses.
• Implementation of boundary metering, voltage-wise loss measurement, and uniform billing.
• Submission of quarterly reports on the rollout of smart meters, which serve as the technical enabler for mandatory ToD billing.
• Maintenance of source-wise power purchase statements reconciled with audited accounts.
• Automatic upward revision of contracted load if a consumer’s recorded maximum demand exceeds the contracted load for three consecutive months.