The Hindu : Power tariff cut for industry, rlys. in A.P.

Online edition of India's National Newspaper
Tuesday, Mar 25, 2003

Southern States

Southern States - Andhra Pradesh

Power tariff cut for industry, rlys. in A.P.

By Our Special Correspondent

HYDERABAD MARCH 24. The Andhra Pradesh Electricity Regulatory Commission (APERC) has not proposed any revision in tariff for domestic and agricultural sectors while marginally reducing the rates for industry and railway traction.

In its tariff order for 2003-04, the APERC has provided slight relief to industries falling in HT-1 category by bringing down the tariff from Rs. 3.71 to Rs. 3.60 a unit.

This reduction of 2.96 per cent is aimed at spurring industrial growth and rationalising tariffs in line with the policy of `cost to serve'.

The commission found basis in the Railways' complaint about high tariff by reducing the rate from Rs. 4.60 to Rs. 4.50 a unit.

Taking inflation into account, the reduction is about 6 per cent.

Overall, there is 0.74 per cent relief in the tariff. However, the commission has assured APTRANSCO and the four distribution companies (DISCOMs) a reasonable rate of return of 16 per cent. The new tariff will come into effect on April 1, 2003.

Releasing the tariff order at a press conference, the APERC Secretary, T. B. Narasimha Rao, said the APTRANSCO and the DISCOMS had projected a net revenue requirement of Rs. 9,780.75 crores but their expected revenue stood at only Rs. 8,031.84 crores leaving a revenue gap of Rs. 1748.91 crores.

The commission had directed the DISCOMS to achieve efficiency gains of Rs. 295 crores reducing the gap to Rs. 1,453.91 crores.

But, with the lowering of tariff for HT-I and railway traction, the revenue gap went up to Rs. 1513.49 crores.

The State Government will bridge this deficit by providing the entire amount as subsidy.

Giving details of the in-built subsidies for various categories, the commission said the domestic category was benefiting to the extent of Rs. 1,017.60 crores through cross-subsidy and Rs. 729.97 crores through Government subsidy.

The total `cost to serve' for the domestic sector was Rs. 3,804.52 crores but the new tariff fetches only 51.88 per cent of this amount.

Against the total cost of Rs. 2051.31 crores for the agriculture sector, the cross subsidy was Rs. 926.61 crores and the Government subsidy Rs. 664.70 crores. The present level of tariff represents only 17.70 per cent of the cost to serve the agriculture category.

The other major subsidy being extended by the State Government was to the Rural Electrical Cooperative Societies (RESCOs) to the extent of Rs. 70.87 crores to cover domestic and agricultural consumers in their areas.

A minor change has been introduced in the LT-II commercial slabs. The first slab is 0-50 units for which the earlier tariff of Rs. 3.95 a unit has been retained.

The other slab is above 50 units for which the tariff has been fixed at Rs. 6.60 a unit against the current tariff of Rs. 7.00 a unit for over 100 units. These changes will yield no additional revenue.

The Commission announced reduction in the rate for the out-of turn allotment scheme in the LT category- V (B) (agriculture) from Rs. 1.25 to Rs. 1.00 a unit.

In respect of seasonal industries (LT-III-B), the demand charges during off season period will be recorded demand or 30 per cent of the contracted demand whichever is higher. The unit rate will be Rs. 4.50 for all units consumed.

The tariff order envisaged a reduction in the transmission losses from 7.25 to 7 per cent. Accordingly, the reduction target for system losses has been reset at 24.63 percent in place of 24.85 per cent projected by APTRANSCO.

The commission said the metered tariff for LT V (A) and HT-IV (B) agriculture categories would be fixed for a period of three years provided the meters are fitted before June 30 this year.

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