Supreme Court Sets Limits on Regulatory Assets for Electricity Tariffs: Emphasizes Accountability and Timely Recovery
The Supreme Court made it clear that regulatory assets are only expected to be very rare, limited to only 3% annually of revenue, and to be fully recovered in 3 years for new or later assets and 5 years for existing or prior assets. Regulatory Commissions are expected to set up cost-reflective tariffs and equally manage regulatory assets in a fully transparent manner and subject to rules and policies. The judgment imposes strict accountability, and has empowered APTEL to ensure compliance and control against regulatory failure.