India urgently needs power tariff increase, says former power secretary

Addressing the conference "Ensuring India's Power Future", former power secretary Anil Razdan said, "India needs graded doses of power tariff increase to ensure distribution companies do not fail".

India needs graded doses of power tariff increase to ensure the sustainability of distribution companies, a senior power expert said on Thursday.

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Addressing the conference "Ensuring India's Power Future", former power secretary Anil Razdan said, "India needs graded doses of power tariff increase to ensure distribution companies do not fail".

According to Razdan, such large losses arise from aggregate technical and commercial losses (AT and C) and low power tariffs.

"Currently cumulative distribution losses amount to Rs.200,000 crore. Only last year's losses came to Rs.39-40,000 crore," Razdan said.

AT and C losses, which are the sum of technical and commercial losses, and the shortage due to non-realisation of total billed amount, currently amount to 26 percent, and according to Razdan these are urgently required to be reduced to 15 percent.

Certain states have up to 50 percent power loss on account of AT and C losses.

Razdan also suggested a specific increase of power tariff to Rs.7 per unit from the prevailing around Rs.3 per unit.

Warning about a future scenario if there are no reforms made, Razdan said that no power was more expensive than priced power.

Speaking earlier, Leena Srivastava, executive director for operations, The Energy and Resources Institute (TERI), which has organised the two-day power conference, said that there was very little choice for the country other than increasing energy efficiency.

"Besides energy efficiency, the renewable energy mix in power generation will need to go up to 30-40 percent by 2030", Srivastava said.

Meanwhile, India's Attorney General G.E. Vahanvati has opined that the Central Electricity Regulatory Commission (CERC) has the authority to revise or regulate tariffs adopted, based on competitive bidding.

Many private power producers are keen to renegotiate the tariffs following the sudden hike in coal prices in major producing countries such as Australia, South Africa and Indonesia.