This document discusses electricity tariff models and the way forward for the power sector in India. It outlines three main tariff models: cost of service regulation, incentive regulation using price caps, and a hybrid model. It notes the advantages and disadvantages of each approach. The document then discusses issues around taking distribution companies towards a more competitive model, including unbundling distribution companies to separate wiring and supply businesses, privatizing distribution company supply functions, and defining the ongoing role of regulators.