Electricity bills may soon rise due to high fuel costs

Consumers may soon have to pay more for electricity, thanks to rising fuel costs of distribution companies.

Consumers may soon have to pay more for electricity, thanks to rising fuel costs of distribution companies, and the government is looking to find a workable solution to rising losses and bad loans of discoms.

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State electricity regulators might soon begin reviewing escalations in fuel costs on a monthly or a quarterly basis, which could then be passed on to consumers more frequently. Moreover, discoms may soon have to overhaul their billing, and other internal management systems to bring down inefficiencies.

Discoms have debts in excess of Rs 4.4 lakh crore, according to Crisil. In 2012, the government had offered a financial restructuring package, signed till now by eight states, which would need to start repaying the loans from October this year.

At a meeting on Thursday stakeholders flagged power purchase adjustment costs and management and administrative overhaul of discoms as key issues. A follow-up meeting is expected this month.