Power distribution companies in Madhya Pradesh have moved to raise electricity tariffs by 10.19% for the 2026-27 financial year, attributing this request to an anticipated revenue shortfall of ₹6,044 crore. The proposed hike is part of a “true-up” petition filed with the Madhya Pradesh Electricity Regulatory Commission (MPERC) that seeks to recover losses reportedly incurred in the previous year.
Under regulatory norms, utilities can file true-up petitions after audited accounts for a completed year become available, allowing them to adjust tariffs if actual costs exceed earlier projections. Through such filings, DISCOMs aim to recover past expenses by passing them on to consumers in future tariff orders.
However, industry experts have strongly criticized the basis of the DISCOMs’ claims, arguing that the financial projections used to justify the tariff hike are flawed. In an objection submitted to MPERC, retired MP Genco additional chief engineer Rajendra Agarwal maintained that many of the cost components included in the petition are unjustified or invalid under existing regulations.
Agarwal asserted that once outdated and unsupported expenses are excluded and tariff norms are applied correctly, the utilities would instead report a surplus of around ₹3,160 crore for 2026-27, negating the need for a tariff increase. He urged the regulator to reconsider the proposed hike and instead look at reducing tariffs given projected profitability.
The objection identifies several problematic elements in the DISCOMs’ claims, including the inclusion of power purchase costs from 15 to 20 years ago that have previously been disallowed by the regulator. Agarwal also flagged other expense categories such as ₹2,185 crore in supplementary bills without proper documentation, ₹832.96 crore listed as unexplained “other costs,” and ₹774 crore in carrying costs that lack transparent justification.
Another concern raised relates to the calculation of distribution losses. According to Agarwal, the use of higher-than-approved loss figures shifts nearly ₹700 crore of additional burden onto consumers. He emphasized that, under regulatory guidelines, utilities should absorb a larger share of these losses rather than passing them on through higher tariffs.
The objection also challenges the recovery of decades-old costs through present-day tariffs, arguing that such practices contradict provisions of the Electricity Act, 2003, which limits the recovery of dues unless they are consistently shown as arrears within a two-year period. Agarwal has called on MPERC to reject claims it considers “illegal,” enforce compliance, and safeguard consumer interests.
