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Friday, April 26, 2024

Assessing regulatory capability in Tamil Nadu electricity regulation: Evidence from appeals

by Bhavin Patel and Renuka Sane.

The Indian journey to decarbonisation faces the roadblocks of electricity policy. One of the critical impediments faced is that of state capability in electricity regulation. There is a new body of knowledge in India, in regulatory theory, that can usefully be brought to bear on the problem of improving electricity regulation. One element of this field is the question of assessing the state of regulatory capability. At any point in time, how would we judge the extent to which electricity regulation in a certain state is working well?

Electricity is regulated by the Central and State Electricity Regulatory Commissions (ERCs), which perform legislative, executive, and quasi-judicial functions. The concentration of power and the lack of democratic accountability in the new administrative state raise concerns about their functioning in modern economies. In India, the ERCs have quasi-judicial powers that are even broader than those of other regulators such as the SEBI. With one electricity regulator -- the TNERC -- in focus, we took up the research strategy of assessing regulatory capability through the analysis of regulatory orders that go to appeal. A key metric of the quality of orders the regulator passes is how well its orders fare at an appellate forum. If the regulator succeeds in defending its decisions, it signifies that the orders are well-reasoned and have followed the procedures required by the applicable law (whatever they be).

In a recent paper, Performance at the Appellate Tribunal as an indicator of regulatory capacity: The case of TNERC at APTEL, we study the overturn rate of the orders of the Tamil Nadu Electricity Regulatory Commission (TNERC) at the Appellate Tribunal for Electricity (APTEL) between 2013 and 2023.

We find that TNERC failed to hold its ground in 52% of appeals. Of these, about half were remanded back to the TNERC, suggesting that it did not do an adequate job of bringing the evidence necessary to decide a matter, despite being conferred the powers of a Civil Court for such purposes under Section 94 of the Electricity Act, 2003. Further, the TNERC lost 86% of matters that involved issues related to how it uses its regulatory powers.

These results raise concerns about the exercise of quasi-judicial authority by the TNERC. There is considerable knowledge in the field of regulation in India, on how such deficiencies can be addressed. If policy makers were to take up such strategies, it would help improve private sector confidence for electricity investment in Tamil Nadu.

Our work is limited to orders that were appealed. There is a selection bias, in that regulated persons make rational choices when deciding to appeal. In the extreme, it is possible to argue that all sound orders are not appealed, and only defective orders are appealed, so the defect rate is just the appeal rate (which is about 8% with appeals to APTEL that we measure, and some appeals that go to the High Court under writ jurisdiction which we do not measure). We suspect the defect rate is higher. Considerations in appealing include issues such as errors in the regulatory order which create a high chance of winning, the expense in appealing, the rupee value at stake multiplied by the probability of winning, and the non-rule-of-law pressures from TNEB in favour of not appealing. The appealed orders, that are studied by us, offer valuable insights into the limitations of state capability in regulation in TN electricity. Such measurement should motivate regulatory reform, and it should be used in measuring the extent of progress in regulatory reform.

Our approach can be usefully applied in analysing and improving electricity regulation in other states. To assist this process, we have also released a detailed Manual For Reviewing Regulatory Orders: Orders of the Tamil Nadu Electricity Regulatory Commission at the Appellate Tribunal for Electricity. This will enable replication of our results for Tamil Nadu, and porting these methods to other states.

The authors are researchers at TrustBridge.

Saturday, April 20, 2024


Janaagraha is hiring: Head - Municipal Finance

We at Janaagraha seek an exceptional individual to lead our municipal finance mission to the next level of impact. We aim to increase municipal revenues, ensure transparency in spending, and improve accountability for citizen outputs and outcomes. Transforming public finance in cities is quintessential to human development in India. Over the last four years, we have achieved remarkable milestones in the pursuit of our municipal finance mission, including:

  • Public disclosure of audited annual accounts of over 4,200 municipalities in a comparable format on
  • Catalyzing property tax reforms in 20 states resulting in a 50% growth in pan-India property tax collections since 2017-18
  • Digital grant management of USD 15 billion of XV FC grants on

More importantly, we have put together an exemplary, majority-women team. We are looking for a senior leader with a proven track record in systems practice to join our team and take our municipal finance program to new heights of systems change.

Key Responsibilities

  • Deliver on government and donor engagements.
  • Engage closely with senior leaders in government and the market ecosystem to both advocate for systemic reforms in municipal finance and to inform Janaagraha's strategy for the same.
  • Continuously strive to transform municipal finance in India at scale and with speed and agility, through a whole of systems approach.
  • Lead planning and development of Janaagraha's Municipal Finance programme.
  • Engage with the urban governance and municipal finance ecosystem.

Qualifications and Experience

  • Master's degree or equivalent in business administration, finance, public finance, public administration, public policy or other directly relevant fields OR a Membership of a Professional Institute such as the Institute of Chartered Accountants of India.
  • 15+ years of experience in government advisory, public finance, business management/consulting or senior leadership roles in finance.
  • Candidates with direct government experience in any civil services are particularly welcome.

Location: Bengaluru/Delhi

Interested candidates can send in their CV to

You can learn more about the role here.

Janaagraha's culture codes can be seen here.

About Janaagraha

Janaagraha is a Bengaluru-based not-for-profit institution working to transform the quality of life in India's cities and towns. It defines quality of life as comprising quality of infrastructure and services, and quality of citizenship. To achieve its mission, Janaagraha works with councillors and citizens to catalyse active citizenship in city neighbourhoods, and with governments to institute reforms to city-systems. Janaagraha has worked extensively on urban policy and governance reforms for over two decades including on JnNURM, and with the XIII, XIV and XV Finance Commissions, Second Administrative Reforms Commission, Comptroller and Auditor General of India, NITI Aayog/Planning Commission, Ministry of Housing and Urban Affairs (MoHUA), as well as the state governments of Odisha, Uttar Pradesh, Tamil Nadu, Rajasthan, and Assam.