After a zero electricity tariff hike (2014-15) in the assembly election year preceded by a rollback of the prevailing electricity tariff, power consumers across the board in Haryana, except the pampered farm sector, will have to shell out more for consuming electricity in the 2015-16 financial year. The Haryana Electricity Regulatory Commission (HERC) on Thursday effected an 8% across the board hike.
HIGHER CONSUMPTION TO COST MORE
While domestic consumers consuming up to 100 units per month have been spared, the regulator has increased the power tariff for domestic consumers consuming 500 units and more than 500 units per month. Those consuming more than 500 units will be hit hard as they will be charged at a flat rate of Rs 6.75 per unit.
The HERC has also increased the tariff for non-domestic consumer by about 8.5%. Similarly, for high tension (HT) industry, there is a hike of about 6%.
The agriculture tubewell supply, which gets highly subsidised electricity, has been spared yet again with a zero hike. Farmers will continue to get power supply for operating tubewells at a rate of 10 paise per unit for the metered connections and a flat rate of Rs 15 per brake horsepower (bhp) per month for unmetered connections.
The Congress government had reduced the farm sector tariff in the 2014 election year from Rs 25 paise per unit to 10 paise for metered connections and Rs 15 per bhp each month from the existing Rs 25 for unmetered connections.
FUEL SURCHARGE ADJUSTMENT
The domestic electricity consumers are already paying fuel surcharge in the range of Rs 1 to Rs 1.6 per unit which is periodically levied in their bills. The fuel surcharge adjustment (FSA) is the additional fuel cost which is not recovered from the consumer but is borne by the power distribution companies while purchasing power from generators.
The HERC in its Thursday orders came down heavily on the two power distribution companies for levying FSA in an arbitrary manner. “Despite clear policy guidelines for recovery of the FSA on quarterly basis, the distribution licensees are levying it in an arbitrary manner.
The commission has given clear verdict about the recovery of the FSA over a designated period but the utility is continuing to recover the past FSA irrespective of the expiry of permitted date.
The FSA of 21 paise per unit (to be charged up to 48 months starting from July 1, 2010, on HT industry should have been stopped from July 1, 2014,” the regulator said.
The commission also said the recovery of the FSA was the recovery from agriculture consumption. The agriculture tariff is subsidised but the impact of the FSA is equally to be levied on the power supplied to agriculture category of consumers. Extra cost incurred for the purchase of this power has to be recovered from this category of consumers. If the tariff for agriculture sector is subsidised, the FSA on this component of energy should come as additional rural electrification (RE) subsidy from the state government instead of passing it on to the non-agriculture consumers.
The HERC said the tariff proposal filed by the distribution companies provides no discussions regarding the methodology followed or for that matter the underlying principles of recasting the distribution and retail supply tariff in Haryana.
The regulator said that as per Centre’s financial restructuring plan (FRP), a zero tariff hike was proposed in 2014-15 and 15% hike in 2015-16. “But in order to cushion the tariff hike in 201516, the HERC allowed tariff hike in 2014-15 to garner additional revenue of Rs 890 crore.
Presently, a hike to garner additional revenue of about Rs 1,500 crore was required in order to effect 15% increase in tariff in line with the FRP. Accordingly, the commission has attempted to garner additional revenue of about Rs 1,420 crore by way of realignment of tariff in 2015-16,” the commission said.
RURAL ELECTRIFICATION SUBSIDY GOES UP
While in the budget estimates presented by the state government in March 2015, the RE subsidy was pegged at Rs 5,624 crore, the subsidy will go much higher at Rs 6,196 crore.
NO IMPROVEMENT IN DISTRIBUTION LOSSES
The HERC said that the position of distribution losses has not improved despite the two distribution companies making huge capital investments every year on various loss reduction measures.
“The licensees are directed to bring down the number of rural feeders with above 50% losses by 50% at the end of the 2015-16 financial year and no urban feeder with above 25% line losses shall exist by the next aggregate revenue requirement (ARR) filing. A failure to comply with the targets set by the commission shall attract penal action under Section 142 of the Electricity Act, 2003, against the executive engineer (XEN) and above of the area concerned,” the commission ordered.