Power tariff hike, subsidy may be announced together

A proposal for subsidised power for domestic consumers using up to 400 units was sent to the Centre as per the orders of the Lieutenant-Governor

The power regulator is expected to announce the revised tariff rates next week after the Budget for Delhi is presented in Parliament.

The Budget is expected to provide subsidy for power consumers, which the Delhi Electricity Regulatory Commission (DERC) might take into account while announcing the new tariffs, sources in the regulator said.

However, DERC chairperson P.D. Sudhakar denied that tariff revision was influenced by the Budget announcement.

Absence of subsidy since this financial year has already affected about 80 per cent of the Capital’s 34.61 lakh power consumers, who use between 200 and 400 units of electricity.

But the power subsidy, if approved by the Centre, will come close on the heels of a possible tariff hike as the power regulator is done with the process of Annual Tariff Revision.

During the public hearing, DERC officials had indicated that since coal prices had gone up, the regulator may partially accept the discoms’ plea to increase the fuel price adjustment cost (FPAC) and the power purchase adjustment cost (PPAC).

A proposal for subsidised power for domestic consumers using up to 400 units was sent to the Centre as per the orders of Lieutenant-Governor Najeeb Jung.

According to Power Department officials, several permutations and combinations have been given to the Centre. The annual financial implication will be Rs.262 crore if a subsidy of Re.1 per unit, up to 200 units, is granted.

In case a subsidy of Rs.1.20 per unit, up to 200 units, and Re.0.80 per unit for incremental units from 201 to 400, is given, the annual financial load will be around Rs.390 crore.

The quantum of subsidy, whether it should be for users consuming up to 400 units or only up to 200 units, will be decided by the Centre when the Budget is presented in Parliament.

Residents were getting subsidy till March 31 for consuming up to 400 units. The Aam Aadmi Party government had enhanced the subsidy for usage of power; earlier it stood at 200 units under the Sheila Dikshit regime.

Given that power bills increased substantially from April 1, a provision for subsidy for power consumers may bring some relief and may help the BJP politically, which is now eyeing government formation in Delhi.

Political players like the Delhi unit of the Congress and the AAP have raised the political pitch over tariff hike and threatened that they will not allow any hike in tariffs.