RERC Finalizes FY 2026-27 Transmission Tariff: Approved Charges Set at ₹37.8 Billion Amid Infrastructure Expansion Mandates

RERC Establishes Financial Framework for FY 2026-27

In May 2026, the Rajasthan Electricity Regulatory Commission (RERC) issued a final order determining the Annual Revenue Requirement (ARR) and transmission tariffs for Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPN). The regulatory decision encompasses the truing-up of financial parameters for FY 2024-25 and defines the cost recovery structure for the FY 2026-27 control period.

The Commission approved Annual Transmission Charges of ₹3,779.89 crore (approximately ₹37.8 billion) for FY 2026-27, representing a reduction from the utility’s petitioned amount.

Impact on Wheeling Costs and Competitive Bidding Mandates

The approved order maintains the retail electricity tariff structure while implementing specific surcharges for Open Access and Renewable Energy (RE) participants. Green power consumers are subject to an additional surcharge of ₹0.05/kWh above the applicable tariff. Under the 2025 regulations, green energy open access is available to consumers with a sanctioned load of 100 kW or more, with no lower load limit for those located within the same electricity division of a distribution company.

A regulatory shift was mandated for the 765 kV Hindaun transmission project, which was moved from the Regulated Tariff Mechanism (RTM) to the Tariff-Based Competitive Bidding (TBCB) route. The Commission ruled that interconnected transmission elements, including the Anta-II, Ajarka, and Hindaun substations, function as a single evacuation corridor. Consequently, these elements cannot be split into smaller independent projects under RTM to bypass the competitive bidding requirements established in the 2025 regulatory framework.

Operational Benchmarks and Financial Adjustments (FY 2024-25 True-Up)

The truing-up exercise for FY 2024-25 evaluated RVPN’s performance against normative benchmarks. The following operational data points were recorded:

• System Availability: Actual performance reached 99.31%, exceeding the 98% normative benchmark required for full cost recovery.
• Incentives: RVPN earned a performance incentive of ₹25.43 crore due to high system availability.
• Transmission Losses: Actual losses were 4.25%, remaining below the 4.50% target.

The Commission applied several financial disallowances based on regulatory prudence checks:

• Disallowed Return on Equity (RoE): A claim of ₹187.15 crore was rejected based on existing state government guidelines.
• Disallowed Insurance Claim: An amount of ₹0.09 crore was excluded as the policy did not specifically cover core transmission line assets.
• Approved Net Gross Fixed Asset Additions: Capitalization was fixed at ₹1,099.82 crore following regulatory scrutiny.
• Emergency Restoration System (ERS): An additional ₹22.52 crore was approved for Operation and Maintenance to minimize the risk of prolonged grid failures and improve system recovery.

Infrastructure Targets and Intra-state Grid Studies

To accommodate rising demand during the ensuing financial year, the Commission approved specific physical grid expansion targets:

• Projected Peak Transmission Demand: 22,190.21 MW.
• 220 kV Lines: 1,918 circuit-km to be commissioned.
• 132 kV Lines: 2,127 circuit-km to be commissioned.
• Capacity Expansion: Installation of 500 MVA transformers at Bhadla and Ramgarh to support renewable energy evacuation.

RERC further directed RVPN to establish a loss reduction roadmap. Additionally, the Commission mandated a committee to study the interdependence between intra-state and inter-state transmission infrastructure. This study aims to determine if Rajasthan consumers are bearing the financial burden of infrastructure primarily utilized to wheel solar power to other states.