While the proposed tariff hikes by the AP Central Power Distribution Company would hit consumers in the lowest rung more severely, an independent study by an APTransco Engineer shows that the existing tariff system is already forcing poor people to pay more.

The analytical study based on figures of consumption collected from the ARR filing of CPDCL for the year 2012 says that the Average Revenue Realisation per unit consumed is higher in the 0-50 slab.

While the revenue realised from those consuming over 50 units each month stands at Rs.3.1 per unit, the same from those consuming below 50 units is Rs.3.64 per unit.

Engineer K.Raghu, the author of the study, attributes the same to actual consumption remaining below the mandatory minimum charges in many cases. Add Electricity Duty and Fuel Surcharge Adjustment, the average revenue would be even higher for the poor, he claims.

“While cross-subsidisation of the poor from the richer class of consumers is widely assumed, the actual figures reveal quite the contrary. The poor are not even consuming what they pay for. This goes against the spirit of the National Electricity Policy which stipulates special cross subsidy tariff for Below-Poverty-Line consumers,” Mr.Raghu says, suggesting that the minimum charges should be reduced to Rs.10, and the unit cost to Rs.1 for the BPL consumers.

He brings in the concept of Marginal Cost of Power Purchase to locate a striking phenomenon of poor consumers subsidising the rich. Every additional unit of power bought at higher price during times of scarcity should be attributed to the luxury consumption by the middle class and the rich, and not to the bare minimum consumed by the poor, he says.

To drive home his point, he again falls back on the CPDCL ARR figures which show that 44.3 per cent of the company’s total consumers fall into the 0-50-units bracket, but consume only 7.8 per cent of the total power. Those consuming over 300 units form only 4.73 per cent, but lay claim to over 25 per cent of the power.

Further, over years, power consumption has risen phenomenally among the richer classes, whereas it has clocked a decline among the poorer sections, Mr.Raghu claims.

For instance, annual consumption in ‘over-300-units’ bracket increased by over 690 million units (nearly 42 per cent) between 2008 and 2012, whereas the same within 0-50 units plummeted by 72.5 million units (4.37 per cent) during the same period.

There have been times when power was bought from external sources at Rs.14-16 per unit, hence the bulk of such financial burden should be transferred to those consuming over 300 units by way of power-intensive equipment, rather than distributed across the slabs, Mr.Raghu, a certified Energy Manager and Auditor, argues.

“There should be a separate category for luxury consumption, with a flat rate of Rs.5.75 per unit up to 300 units and Rs.6.75 per unit thereof. Such measure will garner an additional Rs.250-crore to the company,” he says.

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