• Source:JND
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Electricity Policy 2026: The draft document of the New Electricity Policy, proposing an automatic and annual increase in power rates, has sparked controversy. The New Electricity Police 2026 proposes an annual tariff increase automatically, even if regulators fail to issue notice.

The Union government on January 20 released the draft of the new National Electricity Policy (NEP) 2026, claiming it aims to make the power sector financially sustainable and competitive.

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Why Govt Proposed Changes

Officials associated with the power sector say regulatory delays cause heavy financial losses to electricity distribution companies. The provision is intended to provide temporary relief to these companies.

What is Automatic Tariff Increase?

Under the proposed policy, if a state regulatory commission does not determine new electricity tariffs within a specific time, the rates will be linked to the inflation index and raised automatically. This mechanism is proposed to be implemented from the financial year 2026-27.

In simple words, power rates will automatically be increased based on inflation indices like the Wholesale Price Index (WPI) or Consumer Price Index (CPI), if a state electricity regulatory commission (SERC) fails to issue a tariff revision on time.

However, the exact formula is yet to be released.

How Will Your Electricity Bill Increase Annually?

The power company must first file an application before the regulatory commission seeking a revision of tariffs. If the company does not submit the application, tariffs will not increase automatically.

Even after the application is filed, an automatic increase will not apply if the commission issues an order within 120 days. The automatic hike will only trigger if the company has filed the application on time and the commission fails to pass an order within 120 days.

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Consumer Groups Oppose The Move

Consumer organisations are strongly opposing the automatic tariff increase provision in the draft National Electricity Policy. They argue that it weakens the legal authority of regulatory commissions and opens the door for tariff hikes without the commission’s approval, which directly harms consumer interests.


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