HPERC Announces Electricity Tariff Reduction for Himachal Pradesh Financial Year 2026-27

Executive Summary

The Himachal Pradesh Electricity Regulatory Commission (HPERC) has issued its comprehensive Tariff Order for the Himachal Pradesh State Electricity Board Limited (HPSEBL) for the 2026-27 financial year. Released on March 25, 2026, the order mandates a uniform reduction of 01 paisa per unit in energy charges across all consumer categories. This marginal relief follows a rigorous regulatory vetting of the utility’s performance and arrives on the heels of a historic financial turnaround; HPSEBL recorded a record profit of Rs. 315 crore in FY 2024-25, successfully recovering from accumulated losses that stood at Rs. 3,742 crore as of March 31, 2024. The Commission’s decision to lower rates reflects the systematic passing of cost efficiencies and operational improvements to the state’s consumers.

Key Tariff Changes by Category

The following table details the approved energy tariffs effective for the upcoming fiscal year. The structure reflects the Commission’s efforts to balance social obligations with the technical realities of the state’s power grid.

Note: For consumers governed under a two-part tariff, energy charges are billed in Rs./kVAh.

Regulatory Context and Financial Analysis

The current tariff revision is grounded in the Commission’s “revenue gap analysis,” incorporating the final True-up of uncontrollable parameters for FY 2023-24 and a provisional True-up for FY 2024-25. This cycle marks the 2nd Annual Performance Review (APR) of the 5th Multi-Year Tariff (MYT) Control Period (2025-2029).

For FY 2026-27, HPERC has approved an Aggregate Revenue Requirement (ARR) of Rs. 8,636.16 crore for HPSEBL, an increase from the Rs. 8,403.25 crore estimated for FY 2025-26. Despite this higher revenue requirement—driven largely by adjustments from past periods—the Average Cost of Supply (ACoS) has trended downward. The Commission estimated the ACoS for the upcoming year at Rs. 6.75 per unit, down from Rs. 6.76 per unit in the previous fiscal.

A critical component of the utility’s power purchase cost is the state government’s free power. The Commission has set the rate for the sale of this free power to HPSEBL at Rs. 2.73/kWh for FY 2026-27, a marginal increase from the Rs. 2.70/kWh rate set for the previous period. The Commission has further observed that the utility should maintain priority access to this power to ensure that the benefits of the state’s natural hydro resources are passed directly to the local ratepayer.

Implementation and Effective Date

The revised schedule of electricity rates and charges is mandated to take effect from April 1, 2026. This timeline ensures that the transition between fiscal periods remains seamless for billing cycles across the state. All consumers currently billed under existing rates will see the 01-paisa reduction reflected in their first billable cycle following the implementation date.

Official Regulatory Statement

In finalizing this order, the Himachal Pradesh Electricity Regulatory Commission reaffirmed its primary mandate: ensuring the long-term financial stability of HPSEBL while protecting consumer interests through affordable power. By passing on operational gains while the utility maintains its self-reliance and profitability, the Commission seeks to foster a sustainable energy ecosystem in the state. The Tariff Order for FY 2026-27 has been authorized and signed by the Secretary of HPERC.