To meet losses, plan panel moots power tariff hike
The Planning Commission, in its 12th five year plan (2012-17) document, has suggested an increase in tariffs saying the distribution companies (discoms) have not been able to recover the cost of supply through tariff.delhi Updated: Jul 17, 2012 01:12 IST
You should expect a further increase in power tariffs in the coming years without any assurance of 24x7 electricity supply. The Planning Commission, in its 12th five year plan (2012-17) document, has suggested an increase in tariffs saying the distribution companies (discoms) have not been able to recover the cost of supply through tariff.
“The average cost of supply and average revenue realised has widened and the same has been increasing over the years. This gap is partly a reflection of lower tariff but it also reflects high transmission losses,” the report, to be discussed by state power minister, on Tuesday said.
In fact, the cumulative transmission losses have increased from Rs 17,620 crore in 2007-08 to Rs 42,415 crore, which is more than annual plan allocation of big states such as Bihar, Maharashtra and Orissa. “The cumulative book loses of the state discoms have increased from Rs 79,339 crore in March 2009 to Rs 1,06,247 crore at end of 2009-10,” the panel had said.
It added that the losses are as high as 73% in Uttarakhand, 43.45% in Jharkhand, 44.67% in Bihar, 37.96% in Chhattisgarh, 33.84% in Uttar Pradesh and 40.72 % in Madhya Pradesh. Some other states such as Himachal Pradesh, Andhra Pradesh, Punjab and Tamil Nadu have been able to reduce losses, the panel said.
Seeking to make distribution network financially viable for supply of 65,550 MW power from present 27,750 MW by 2016-17, the panel has suggested higher tariff realisation through multi-layer tariff framework, where the billing depends on amount of electricity consumed.
In addition, the panel wants the discoms to adopt time of the day metering for effective demand size management. This would mean higher tariff for electricity consumption during peak hours.
However, bigger electricity consumers -- consuming one MW power each month -- should be allowed to choose their own sources of supply. "This was mandatory since January 2009 but has not been operationalised due to reluctance of the state governments," the panel said, favouring its implementation.
Giving example of Bhiwandi, Maharashtra, where power losses went down from 63% to 19% after introduction of franchising, the panel has suggested adopting such private participation to improve efficiency and reduce losses.