Telangana: Discoms likely to seek increase in power tariff from next fiscal

Speculation is rife that Telangana government may allow Discoms to increase the power tariff during the financial year 2024-25 to reduce their debts

Hyderabad: With the Telangana State Electricity Regulatory Commission (TSERC) reportedly asking State-run power utilities to submit proposals for determination of the Aggregate Revenue Requirement (ARR) by January 31, speculation is rife that the State government may allow Discoms to increase the power tariff during the financial year 2024-25 to reduce their debts.

Sources said it would be very difficult for the power utilities to sustain if the power tariff was not increased as the debts were growing each day. In case the Congress government decides not to increase the tariff, it will have to give over Rs.25,000 crore as annual subsidy to the Discoms to pay debts and purchase power, the sources said, adding that the government had allocated Rs.11,000 crore to Discoms during the current fiscal as subsidy and repayments.

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Taking in consideration the current financial health of the Discoms, it looks like Discoms would be seeking an increase in the tariff to overcome the financial crisis. The discoms have recently submitted proposals to the TSERC seeking permission to collect a surcharge of Rs.1.95 per unit from consumers who buy and use electricity from open access from April 1 to September 20. On February 9, the ERC will hold a public hearing in this regard.

Discoms have to submit ARR proposals to the ERC by November 30 before revision of electricity charges at the beginning of every financial year, but last year the then government could not do so due to the assembly election on November 30. Discoms were reportedly asked to submit the ARR by January 2, but since they failed to do so, the ERC has once again asked it to submit the ARR by January 31.

The ERC will conduct a public hearing on the submitted ARR within 120 days and give a verdict on the revision of charges by March 31. Based on this, from April 1, discoms will have the power to increase electricity charges.

In November 2022, the two Telangana State Power Distribution Companies TSSPDCL and TSNPDCL did not propose any increase in the retail supply tariff for the year 2023-24 by submitting the existing tariff as part of filing their ARRs with the TSERC for the next financial year, hence there was no increase in tariff during the current fiscal.

With the new Congress government decided to continue free power to agriculture sector, weaker sections and trade based castes and also making efforts to launch the Gruha Jyothi Scheme, under which the government proposes to provide 200 units of electricity free of cost every household in the State, there is lot of pressure on power utilities to meet the demand.

The State government tabled a White Paper on the financial health of the power sector in the State assembly revealing that the Discoms had debts of Rs.81,516 crore and the accumulated losses of Discoms increasing to Rs.62,461 crore as on October 31 last year.