What happened (policy proposal) — Draft National Electricity Policy, 2026
The Ministry of Power released Draft National Electricity Policy, 2026 under the Electricity Act, 2003 to balance two goals: electricity sector financial sustainability and consumer affordability. The draft proposes directions for distribution licensees’ power procurement planning and for tariff recovery rules, including mechanisms to pass through power purchase cost changes to consumers.
Background and earlier position — tariff setting and consumer protection
Under the Electricity Act, 2003, electricity tariffs are determined by Appropriate Electricity Regulatory Commissions. The Central Government’s National Tariff Policy guides these commissions. State Electricity Regulatory Commissions set retail tariffs by considering power procurement, transmission, wheeling and supply costs. State Governments may provide subsidies to any class of consumers, including domestic consumers, within the tariff determined by the State Commission.
Consumer protection is supported through the Electricity (Rights of Consumers) Rules, 2020. These rules cover standards for new electricity connections, quality and reliability of supply, metering and billing, grievance redressal, compensation for specified service deficiencies, and consumer-centric service delivery.