Power consumers made to pay for discoms' inefficiency | chandigarh | Hindustan Times
Today in New Delhi, India
Mar 28, 2017-Tuesday
New Delhi
  • Humidity
  • Wind

Power consumers made to pay for discoms' inefficiency

chandigarh Updated: Apr 03, 2013 12:05 IST
Navneet Sharma

Power consumers in Haryana reeling under price rise have been dealt another blow by the increase in electricity tariffs.

The tariff increase - the fourth revision in electricity rates in the past one year - announced by the three-member Haryana Electricity Regulatory Commission (HERC) in its distribution and retail supply tariff order on Sunday hit the domestic consumers the hardest among others.

Though the regulator put the average increase in power tariffs at 13% in its official release, there is a double whammy for the domestic consumers, craftily concealed in the jugglery of figures and missed out by most.


Besides the rate increase, the existing "telescopic slabs" for domestic supply have been tinkered with to deny the benefit of tariff concession of lower consumption category to middle and high-end electricity consumers in the state.

For instance, a consumer, whose monthly consumption is 101 units, will now have to pay Rs 495 as per the revised basic tariffs instead of Rs 383 earlier - a jump of

Similarly, the bill of consumers with monthly consumption of 201 and 251 units will increase by 18% and 17%, respectively. The hefty fuel surcharge adjustment (FSA) currently applicable on consumers of different categories and sundry charges such as electricity duty and municipal tax are extra.

The actual impact will be felt by the domestic consumers when they get their bills, depending on their consumption.

The tariff hike is likely to hit the industry as well.

"The output of core sector industries is contracting. The demand in automobile and some manufacturing sectors is sluggish. Rising inputs costs will make them uncompetitive. They may not be able to pass through these costs," an energy sector expert said.

But more bad news is likely in the coming months. The regulatory commission has, in its generation tariff order, allowed Haryana Power Generation Corporation Limited (HPGCL) to recover Rs 546 crore from distribution companies, Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN) within this year as part of additional power purchase cost for financial years 2011-12 and 2012-13.

"As and when HPGCL starts the recovery, the amount will be passed on to consumers as FSA," according to sources. Similarly, only 45% (Rs 1,042 crore) of the regulatory asset amounting to Rs 2,343 crore is being recovered this year.

The balance will be recovered in the next two financial years.


Though the cost of power purchase has been going up continuously, the poor efficiency levels are responsible for the financial difficulties of the two corporations.

Their distribution losses, for instance, have been a matter of concern from the time of their inception. "Despite claims that they are making huge capital investments to reduce distribution losses, the position has not improved," the commission remarked in its order.

In the past 10 years, UHBVN's distribution losses are almost at the same level. While the losses were 31.74% in 2001-02, the figure was 31.20% in 2011-12. As for DHBVN, the distribution losses have reduced by only 5.52% during the same period. And this is reflecting adversely on the working of the two companies.

Of the 3,443 feeders (11 KV) in UHBVN, 284 feeders reported losses above 75% and 513 feeders between 50% and 75% during the April-September 2012 period, with bulk of them being rural domestic feeders. DHBVN, with a total 3,186 feeders, is somewhat better placed with 15 feeders having losses above 75% and 286 feeders between 50% and 75%.

"There are feeders on which losses are consistently above 50%, but the companies have not bothered to get energy audit of such feeders done and take suitable measures to curtail the same," the commission said.

The two discoms have spent Rs 2,700 crore on high voltage distribution system in the past four years to curb losses, but not achieved the desired improvement. While tardy replacement of defective meters and distribution transformers has added to their woes, outstanding receivables from consumers including government departments, huge short-term borrowings and rising employee costs remain areas of concern.

"The poor capital output ratio and labour output ratio are also proving a drag on working of the corporations," the sector expert said.