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.

Updated on: Jul 17, 2012, 01:12:22 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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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.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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