State minister Shankar Sen said a notice will be issued soon clearing the way for SERC in accordance with the Electricity Regulatory Commission Bill 1998, which has already been passed by Parliament.

The Bill provides for the creation of a Central Electricity Regulatory Commission (CERC) and similar state-level bodies, rationalisation of electricity tariff, framing of transparent policies on subsidies, promotion of efficient employees and charting of environmentally benign policies.

Power tariffs have so far been under the control of state governments, which have often been unable to increase tariffs because of political compulsions.

The quasi-judicial SERC will decide the tariffs for the state, and its recommendations will be mandatory for all private and public power utilities in the state except those owned by the Uniongovernment.

Sen said any consumer not satisfied with tariffs set by the CERC can move the courts.

The SERC will hear all parties concerned, including the public, before setting tariffs. It will also decide the tariffs for independent power projects.

The SERC will have a maximum of three members, with expertise in engineering, law, economics, commerce, finance or management. The body will regulate tariffs, power purchase agreements and procurement by transmission and distribution utilities.

The SERC may be also be given additional functions via state government notifications, including power to regulate investment approvals for generation, T&D and supply. It will also issue licences for T&D, and determine the conditions and working of the licences.

The SERC will also aid and advice the state government in working out power policy or any other matter referred to it by the government.

Asked whether the state would subsidise the tariff fixed by the SERC, Sen pointed out that the Electricity RegulatoryCommission Bill has said that in such cases the state governments should compensate the person affected by a SERC decision.

While fixing the tariff, the commission will take into consideration factors like cost of generation, sales, consumer mix and rate of return of the power utilities.