These and many more measures, outlined in the consultative paper on tariffs released by the Central Electricity Regulatory Commission (CERC) today, are essentially aimed at encouraging State Electricity Boards (SEBs) to start contracting directly with suppliers, to actually learn how to manage their demand and supply loads by buying power at differentiated rates and charging consumers differential tariffs. Over the long run, the attempt is to enable SEBs to move towards a free or price-based-incentives market, with both suppliers and customers free to enter into contracts with anyone.

And to ensure that SEB's immediately start reducing tariffs charged tocustomers, CERC has floated the idea of linking the annual hikes to the annual rate of inflation or some such index -- and to build in incentives for increasing efficiency, it proposes to reduce this index by some `X' factor. You could then have a maximum annual increase of `WPI minus X' only, where WPI is the wholesale price index.