55% increase in Bihar power tariff from Apr 1 | india-news | Hindustan Times
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55% increase in Bihar power tariff from Apr 1

The BERC has increased by 174% the lowest power tariff slab of rural domestic consumers, while it has almost doubled the same for urban domestic power consumers.

india Updated: Mar 27, 2017 16:20 IST
Ruchir Kumar
Bihar Electricity Regulatory Commission chairman SK Negi (centre) announcing the new power tariff in Patna.
Bihar Electricity Regulatory Commission chairman SK Negi (centre) announcing the new power tariff in Patna.(Ruchir Kumar/HT photo)

Power consumers were in for a shock on Friday when the Bihar Electricity Regulatory Commission (BERC) approved an average 55% hike in power tariff — the highest so far — for 2017-18. The new tariff will be effective from April 1.

The tariff hike was against an overall increase of 84% the two discoms had proposed.

The BERC has almost doubled the lowest slab of power tariff for urban domestic power consumers. Against the existing tariff of Rs 3 per unit for the first 100 units of consumption, an urban domestic consumer will now have to pay Rs 5.75 — an increase of 92% (see box).

For power consumption between 101 and 200 units in a month, the tariff slab has been increased from Rs 3.65 to Rs 6.50 per unit – up by 78%. For 201 to 300 units, the slab is up from Rs 4.35 to Rs 7.25 per unit — up by 67%. For power consumption above 300 units, the per unit rate will go up from the existing Rs 5.45 to Rs 8 — up by 47% ¬¬for urban domestic consumers, which also includes those residing in municipal areas.

For rural domestic consumers, the hike has been steeper. Against an existing tariff slab of Rs 2.10 per unit, the BERC had approved Rs 5.75 — up by 174% — for the first 50 units. Interestingly, the discoms had proposed Rs 5.50 per unit for the first 30 units. For 51-100 units, the new rate was Rs 6 per unit against Rs 2.40 — up by 150%. For consumption above 100 units monthly, the new rate is Rs 6.25 per unit against the existing Rs 2.80 — up by 123%.

In addition to energy charges, the regulator has also increased fixed charge of urban domestic consumers. Fixed charge is the connected load, also known as sanctioned load, or just load on electricity bills. Utilities charge more fixed cost for incremental connected load.

Against an existing fixed charge of Rs 55 for the first kilo-watt (kW) and Rs 15 for every subsequent kilo-watt, the BERC has fixed a uniform charge of Rs 40 per kW. Thus, a power consumer, having a load of 5kW, who used to pay a fixed charge of Rs 115, will now have to pay Rs 200 monthly.

This is the first time the commission has fixed power tariff without taking into account government subsidy for BPL, rural domestic, rural non-domestic and agriculture consumers.

BERC chairman S K Negi, while releasing the new tariff, said if the state government extended subsidy support to BPL and rural consumers, as agreed in the memorandum of understanding of the Ujwal DISCOM Assurance Yojana (UDAY), the increase would come down to 28%.

Uday is the Centre’s financial turnaround and revival package for electricity distribution companies. It allows state governments, which own the discoms, to take over 75% of their debt as of September 30, 2015, and pay back lenders by selling bonds. Discoms are expected to issue bonds for the remaining 25% of their debt.

To promote online payment of power bills, the BERC allowed a rebate of 1%. This was in addition to the existing rebate of 1.5% for timely payment.

The commission also removed from all categories of consumers the minimum monthly charge (MMC), which is the minimum energy charge a consumer has to pay depending on his load. Last year it had waived off the MMC of consumers belonging to domestic, non-domestic, urban commercial, religious places, trust, educational institutions, etc. categories. It had, however, retained the MMC for rural domestic consumers.

Meanwhile, the Bihar Industries Association (BIA) has decried the steep hike in power tariff.

Demand for subsidy to urban consumers

Given the inflation and the steep increase in power tariff, former BERC tariff consultant Nand Sharma had demanded that the government should extend subsidy even to urban domestic consumers. He said that an urban domestic power consumer, having a 5 kW load and consuming 400 units per month would now have to pay Rs 2,950 against an existing bill of Rs 1,760.

At present, the government extends subsidy only to BPL and rural consumers.