What is regulatory asset and regulatory surcharge?
A regulatory asset is a discom cost the commission allowed but deferred; a regulatory surcharge collects it from bills later. Also called regulatory asset, regulatory surcharge, tariff surcharge, regulatory asset surcharge, true-up surcharge.
- Plain English
- Official sources
- Bill terms A–Z
Regulatory asset and regulatory surcharge on your bill
Sometimes the commission does not raise tariffs enough to cover allowed costs. The unrecovered gap becomes a regulatory asset.
The discom pays interest (carrying cost) on this gap. Consumers pay the gap and the interest later.
A regulatory surcharge recovers it. Puducherry adds 10% of energy and demand charges. Delhi adds 8% of fixed and energy charges.
Example (Puducherry): 10% of energy Rs 1,280 + fixed Rs 149 = Rs 142.90, billed as Rs 143.
The surcharge ends when the gap is recovered. Check the order for the end date.
Related terms
Official sources
- DERC (Terms and Conditions for Determination of Tariff) Regulations, 2017 (MYT Regulations), reg. 2(15) 'Carrying Cost'
“"Carrying Cost" means the cost for funding of Regulatory Asset/accumulated Revenue Gap;” - DERC (Terms and Conditions for Determination of Tariff) Regulations, 2017 (MYT Regulations), reg. 11(i)
“Statement on source of financing and amortization of Regulatory Asset, wherever applicable, created through Revenue Gap.” - JERC Tariff Order for Puducherry Electricity Department, 24-09-2025, s.6.2.5 (from project tariffs.js), s.6.2.5
“levied in the monthly/bimonthly bill as a percentage of the total Energy and Demand charges”
We read this in an official document that quotes the main rule, not in the main rule itself.
Read on 17 October 2026. Your State regulator’s rules and your discom’s bill have the final word.