New Delhi, May 22 -- The Central Electricity Authority (CEA) under the Indian government recently recommended that state power distribution utilities rejig consumer tariffs in phases to align them closer with the costs incurred.

Currently, while their books appear balanced when they annually seek tariff approvals from state regulators to levy on consumers, a significant chunk of their expenditure-the fixed costs borne, be it power purchase payments or employee salaries-is misaligned with their pricing systems.

According to the CEA, while the fixed part accounts for 38-56% of utilities' total costs, the 'fixed' charges collected from consumers bring in only 9-20% of the total retail revenue required to cover expenses. The rest is to be r...