Electricity Tariffs in India; CERC Power Exchange price cap

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On 2 April 2022, India’s Central Electricity Regulatory Commission (CERC) had set the price of electricity on power exchanges at ₹ 20 per unit, lowering it to ₹ 12 per unit to protect consumer interests.

Protecting Consumer Interests

  • The order took into account the soaring costs of electricity purchase by state distribution companies, including costs of imported coal.



  • This intervention came after about 13 years, aimed at safeguarding consumers and reducing opportunities for profiteering by power producers.

  • The Commission noted that even temporarily elevated prices hurt consumers and undermine trust in the power market.

Supply-Demand Mismatch

  • The CERC observed that on power exchanges, “buy bids” significantly exceeded “sell bids” (or supply), indicating high demand and constrained supply.

  • Average electricity price in late March 2022 had crossed ₹ 18.70/unit, with maximum prices repeatedly touching ₹ 20/unit.

  • Demand reached around 199 GW on 17 March, and since then hovered around 195 GW.

Why the Surge in Demand?

  • The increase was attributed to the start of hot weather and post-pandemic economic activity picking up.

  • Further demand rises were expected, especially in north-west, north-east and central India, as temperatures were projected above normal.

  • Supply was expected to improve by May 2022, when wind and hydro power generation typically increase.

CERC said the price moderation would be aligned with real market conditions, and that such controls would protect consumers without severely impacting trading volumes.

What’s New: Tariff & Price Trends (2025)

Since that 2022 order, some changes and trends have emerged:

  1. Lower Competitive Tariffs for New Renewable Projects
    For example, the Solar Energy Corporation of India (SECI)’s large solar projects have achieved tariffs around ₹ 2.56-₹ 2.57 per unit (kWh) in recent auctions. (Mercomindia.com)

  2. State-level Retail Tariffs for Consumers
    Domestic, commercial and industrial consumers continue to pay varying rates depending on their state, slab (units consumed), time of the day, and whether subsidies apply. Some recent state tariffs (2025) are:

    State / Consumer Type

    Domestic (low usage)

    Domestic (higher usage)

    Commercial / Industrial

    Delhi

    ~ ₹ 3.00-₹ 6.50/unit (for lower consumption slabs) (AC Bill Calculator)

    higher slabs could be more above ₹ 6-8/unit (NoBroker)

    Commercial & industrial often ₹ 6-12/unit in many states (NoBroker)

    Maharashtra

    Domestic low slabs around ₹ 3.67/unit; higher domestic slabs up to ₹ 9.65/unit (AC Bill Calculator)

    –

    Industrial/commercial sometimes over ₹ 10/unit or more depending on demand charges etc. (Arka360)

    Karnataka

    Domestic: ~ ₹ 3.75-₹ 7.25/unit depending on slab (AC Bill Calculator)

    –

    Commercial/industrial higher, often in dual‐rate, with peak charges etc. (Arka360)

    Tamil Nadu

    Some very low rates for first few units; full domestic rates ~ ₹ 2.25-₹ 4.00/unit for lower slabs; higher slabs more (AC Bill Calculator)

    –

    Commercial/industrial rates higher (rates vary) (Arka360)

  3. Tariffs Are Much Lower Than ₹ 12/unit for Most Domestic Use
    Except in some high-usage or peak demand / industrial categories, domestic tariffs in most states are well below ₹ 12/unit. (The ₹ 12/unit level may be reached or exceeded in large industrial/HT categories, or special cases.)

Current Situation in 2025 — Delhi Tariffs & Spot / Exchange Prices

Delhi Domestic Tariffs (2025)

Based on recent tariff orders and utilities (DERC / BSES / BYPL / BRPL), here are approximate domestic energy charge slabs + fixed charge structure in Delhi for 2025:

Consumption Slab (Units per month)

Energy Charge (₹ per kWh / unit)

0 - 200 units

~ ₹ 3.00 / unit Housing+3vaysolar.com+3NoBroker+3

201 - 400

~ ₹ 4.50 / unit vaysolar.com+2NoBroker+2

401 - 800

~ ₹ 6.50 / unit vaysolar.com+1

801 - 1,200

~ ₹ 7.00 / unit vaysolar.com+1

Above 1,200

~ ₹ 8.00 / unit NoBroker+1

Also, fixed charges (based on sanctioned load) are part of monthly bills in Delhi. For example:

  • Up to 2 kW load: ~ ₹ 20 / kW / month vaysolar.com

  • Higher loads have higher fixed charges per kW. vaysolar.c

Power-Exchange / Spot Prices (2025)

  • The Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL) provide data on spot / day-ahead markets. On 12 September 2025, for example, the average market clearing price (MCP) was ~ ₹ 9.94 / unit on PXIL. powerexindia.in

  • These spot prices tend to fluctuate depending on supply, demand, fuel costs, weather (e.g. rainfall for hydropower, wind for wind power), etc.

Comparison: Delhi Retail vs Exchange Spot Prices

  • For many domestic consumers in Delhi, the retail “energy charge” per unit is well below the ₹ 12 ceiling that CERC had earlier set for power-exchanges (2022).

  • Spot / exchange prices in 2025 (like ~₹ 9-10/unit) are higher than many domestic slab rates, but are relevant for DISCOM procurement, industrial users, or for pricing in case of open access / bulk purchases.

  • Thus, while domestic consumers pay lower tariffs (especially at lower consumption slabs), those who buy power at spot rates (or for industrial/commercial use) see rates that can approach or exceed these spot prices, depending on circumstances.

Examples

  • Suppose a household in Delhi uses 150 units/month. They might pay ~ ₹ 5-7/unit for marginal units. So total energy charge might be in that range, plus fixed/monthly charge etc.

  • An industrial user in Maharashtra, drawing high load and using power at peak hours, could be paying ₹ 10-12/unit (or more) depending on demand charges, time of use charges, tariffs set by the State Regulatory Commission.

  • In Tamil Nadu, some huts or low-income rural connections might enjoy very low energy charges (subsidised), possibly ~ ₹ 1-₹ 2/unit for initial units. But once usage crosses certain slabs, rates increase steeply.

Comparison to the 2022 CERC Power Exchange Price Cap

  • The 2022 order fixed the price at ₹ 12/unit on power exchanges as a ceiling, to tame volatile spot prices. In 2025, most retail tariffs for regular domestic consumers are well below this cap.

  • However, certain commercial/industrial / high-demand consumers, or electricity traded on exchanges during peak times, may still face rates approaching or exceeding ₹ 12/unit.

Caveats & Disclaimer

  • Electricity tariffs are set by state regulatory commissions (SERCs) and can vary widely by category (domestic, commercial, agricultural), slab (how many units consumed), time of day (peak vs off-peak), fixed charges, subsidies, taxes, meter type etc.

  • The data presented here is based on publicly available tariff orders and reports as of mid-2025. Tariffs can change—some states revise yearly or more frequently.

  • Power exchange prices (spot market) are volatile and subject to supply/demand, fuel cost fluctuations, weather impacts etc.; regulatory caps or price bands may apply.

  • Always refer to your specific state/regional electricity distribution company or regulatory commission for exact and up-to-date rates for your location and consumer category.


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