What is ARR and true-up?
ARR is the cost a commission allows a discom to recover in a year; the true-up later compares it with actual audited costs. Also called Aggregate Revenue Requirement, Annual Revenue Requirement, ARR, truing up, APR, revenue gap.
- Plain English
- Official sources
- Bill terms A–Z
ARR and true-up on your bill
Each year the commission approves the discom's ARR. Tariffs are set to recover it.
After the year ends, the commission compares audited actuals with the approved figures. This is the true-up.
If actual allowed costs were higher, a revenue gap results. Consumers may pay it later through a surcharge or higher tariff.
Example: approved ARR Rs 1,000 crore, allowed actual cost Rs 1,050 crore. The Rs 50 crore gap is recovered later.
You can object to a discom's ARR petition at the commission's public hearing.
Official sources
- JERC Tariff Order for Lakshadweep Electricity Department (Petition No. 143/2025, 19-09-2025), reg. 12.3(a), p.23
“True-up: a comparison of the audited financial and actual operational performance of the Applicant” - DERC (Terms and Conditions for Determination of Tariff) Regulations, 2017 (MYT Regulations), reg. 2(3)
“means the costs pertaining to the Utility's business as determined by the Commission to be admissible in a Financial Year”
Read on 17 October 2026. Your State regulator’s rules and your discom’s bill have the final word.