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Power tariff hike soon to rescue discoms

business Updated: Oct 14, 2011 00:45 IST
Anupama Airy
Anupama Airy
Hindustan Times
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Electricity may cost more across the country, as the Planning Commission has advised a tariff hike to save the state distribution companies (discoms) from unsustainable losses.

The quantum of hike, however, will be decided after consultations with state governments, according to an official of the commission.

Private discoms, such as BSES, Tata Power and CESC operating in Mumbai, Delhi, Orissa and Kolkata, have also been seeking tariff hikes to cover rising costs.

In Delhi, the state electricity regulatory commission recently approved a proposal of Anil Ambani-owned BSES to raise tariffs.

Planning commission deputy chairman Montek Singh Ahluwalia - who had been asked by Prime Minister Manmohan Singh to look into the issues affecting the power sector - said the poor financial health of the discoms "reached a tipping point".

He told the PM the only way out was a tariff hike, as states had been forcing discoms to keep consumer tariffs low.

"The PM will be away for a week. I have identified eight issues, each of which will be reviewed in consultation with the concerned ministries and a presentation will be prepared for the PM in October."