The Hindu : Ryots have to choose between flat rate & metered charges

Online edition of India's National Newspaper
Wednesday, Oct 16, 2002

Southern States

Southern States - Tamil Nadu

Ryots have to choose between flat rate & metered charges

By V. Jayanth

CHENNAI Oct. 15 . Even as opposition parties are preparing for an agitation against the proposal before the State Electricity Regulatory Commission for introduction of a flat rate or a metered charge of 50 paise a unit for agricultural consumers, the Tamil Nadu Electricity Board has made its fiscal position clear to the SERC.

Based on a commitment given to the State Government and under the terms of the Memorandum of Understanding signed between the State and the Centre on power reforms, the TNEB filed proposals for revision of the tariff with effect from December 1. The ball is now in the SREC court and the commission will hold public hearings before coming up with its recommendations, which will have to be implemented.

Officials explain that tariff revision has now been taken out of the purview of both the TNEB and the State Government, which can, hereafter only make their `submissions' to the SERC, set up under an Act of Parliament to take over this task.

"If the State Government is not in a position to bear the entire subsidy burden, it will have no choice except to say so and let the SERC fix a tariff which will make the TNEB self-sufficient in the first phase and profitable in due course," says a senior official. The Electricity Boards are supposed to earn returns of at least three per cent on their investments.

The TNEB has submitted to the SERC proposals on tariff revision, subsidies and free power supply to the farm sector, which have been clearly documented — now posted on its web site also.

The choice before the Commission, and perhaps farmers, is between a flat rate of about Rs. 600 per hp and a consumption charge at 50 paise a unit. Even then, it is argued, Tamil Nadu will have the lowest rate for farm power.

Punjab is the only other State which provides free power, but is committed to scrapping it, under a similar MoU signed with the Centre. According to a detailed study and costing done by the TNEB, about 9,000 million units is consumed by the farm sector free of cost. The supply should cost the TNEB a little over Rs. 2,800 crores, of which the Government subsidises (or returns) only Rs. 250 crores.

This has been adding to the burden of the board, over the years. Though the farmers use anything from 3 to 10-hp motors to pump water, every agriculturist has, on an average, at least a 5-hp motor.

Even consumption of 5,000 million units, at 50 paise a unit, will yield Rs. 2,500 crores.

And that should help the TNEB come out of the red — now the losses are put at Rs. 2400 crores. Annually, the board provides about 40,000 new farm connections, but they are not metered. An original lot, before free power was introduced, are still metered and provide the basis for the TNEB calculations now. There are more than 16 lakh free power connections, but 1.5 lakh farmers pay a flat rate of Rs. 250 per hp.

The board has calculated that each of about 5.6 lakh agricultural pumpsets works on 3 hp; another eight lakhs at between 3 and 5 hp; about 1.6 lakh connections range between 5 and 7.5 hp, and about one lakh farm connections function at 7.5 to 10 hp or more.

It has been estimated that about 82 lakh hp of the connected load goes to the farm sector.

While suggesting a levy of a tariff for agricultural connections, the TNEB studied the position in the neighbouring States and also the rates obtaining in the entire country. Karnataka and Andhra Pradesh, for instance, had a combined tariff of flat rate and consumption charge.

The TNEB's option of charging Rs. 600 per hp would still be "very competitive", while the levy of 50 paise a unit may make it even cheaper for farmers.

But these 16 lakh connections have to be metered and it will take two or three years to complete the task, costing about Rs. 4,000 per consumer. It is now for the SERC to fix an appropriate tariff.

Printer friendly page
Send this article to Friends by E-Mail

Southern States

Stories in this Section

Neyveli water to be tapped for Chennai

DVAC registers wealth case against Durai Murugan

PM must force Karnataka to release water: DMK

Northeast monsoon alone can save crop

Karnataka to send Mani as emissary?

'T.N. ordinance anti-Dalit'

Ryots have to choose between flat rate & metered charges

Industry protest not over: Bharatiraaja

SBI gesture to farmers

TMC out of EC list

Rs. 78-crore silk sarees pile up

Governor, CM greet Kalam

Centre shirking responsibility: MDMK

Fast in Vellore jail

Rajnikant must clarify: Ramadoss