Power utilities hint at ‘inevitable’ hike in tariff

Deficit for next fiscal put at Rs. 7,716 crore, proposals likely to be submitted on February 2. The average cost of supply has been projected to Rs. 5.99 a unit, marking an increase of 15.5 per cent (Rs. 0.80 a unit) over Rs. 5.19 a unit approved by the commission for 2013-14 fiscal.

January 28, 2015 12:00 am | Updated June 12, 2016 11:59 pm IST - VIJAYAWADA:

The Energy utilities have put the revenue deficit for the next fiscal at Rs. 7,716 crore, indicating the necessity for an upward revision of tariff.

The utilities projected the annual revenue requirement (ARR) to Rs. 30,308 crore while the projected total revenue from current tariffs was estimated at Rs. 22,592 crore. Energy requirement for the year has been pegged at 58,191 million units as against the availability of 54,884 MU from long-term sources, leaving a deficit of 3,307 MU. The gap, however, is expected to be bridged by short-term power purchases of 2,000 MW (14,394 MU) from June this year to March next, leaving a surplus of 11,087 MU to meet the peak load.

The Eastern and Southern power distribution companies submitted their ARRs for the coming year to the AP Electricity Regulatory Commission on Tuesday. The utilities, however, did not file the tariff proposals projecting the ways and means through which they would fill the gap in revenue requirement and its realisation.

According to sources, the quantum of hike that would be passed on to the consumers would be fixed after the government announces subsidy for select categories including free power supply to farmers. Senior officials of the power utilities are unsure about the quantum of subsidy, given the cash crunch the State is facing. The utilities would present the tariff proposals to the APERC, tentatively on February 2.In the ARR, the revenue deficit for retail supply business (including the variation in power purchase cost which could not be recovered due to repeal of FSA regulations) would be Rs. 2,0004 crore. Added to this is the short term power purchase burden for un-despatched energy at around Rs. 567.15 crore.

The average cost of supply has been projected to Rs. 5.99 a unit, marking an increase of 15.5 per cent (Rs. 0.80 a unit) over Rs. 5.19 a unit approved by the commission for 2013-14 fiscal. The reasons behind the increase in cost of supply are non-revision of tariff in 2014-15 fiscal which would widen the revenue gap in the subsequent years. The utilities arrived at the estimates after factoring in the availability of 15,581 MU from 100 per cent power allocation share of the Hinduja and Krishnapatnam projects.

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