Telangana farmers oppose proposed PM-KUSUM power tariff cut

Farmers under the PM-KUSUM scheme have opposed the Telangana government's proposal to reduce the power purchase tariff from Rs.3.13 to Rs.2.98 per unit, saying the move will hurt project viability, reduce bank funding prospects and increase financial losses.

Hyderabad: Farmers who signed Power Purchase Agreements (PPAs) under the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) scheme have expressed concern over the State government’s proposal to reduce the power purchase tariff.

When the PPAs were signed last year, farmers were assured of Rs.3.13 per unit for the electricity generated. The government is now proposing to reduce the tariff to Rs.2.98 per unit, a move that farmers say will significantly affect the viability of their projects.

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Under the PM-KUSUM scheme, TGREDCO invited applications from individual farmers, farmer groups, cooperatives, Panchayats, Farmer Producer Organisations (FPOs), Self-Help Groups (SHGs) and others to establish grid-connected solar power plants on owned or leased land.

The electricity generated is to be purchased by DISCOMs at the tariff determined by the Telangana Electricity Regulatory Commission (TGERC) under Component A of the scheme for 25 years. Farmers can establish 0.5 MW, 1 MW or 2 MW solar plants depending on their capacity. Setting up a 1 MW plant costs around Rs.3.75 crore.

The proposed tariff revision has drawn objections from farmers. A hearing before the TGERC on the issue was scheduled but has now been postponed to August 4.

The government has cited the reduction in GST from 12 per cent to 5 per cent as the basis for lowering the tariff. However, farmers argue that the prices of steel, diesel, copper and other inputs have increased sharply, offsetting any savings from the GST cut.

According to members of the Telangana PM-KUSUM Farmers Association, the proposed reduction of Rs.0.15 per unit could result in a monthly loss of around Rs.20,000 for a farmer, equivalent to the salary of one employee. They urged the government to withdraw the proposal.

The association also pointed out that banks sanction loans based on projected repayments and the approved tariff. A lower tariff, they said, could make banks reluctant to finance new projects, affecting the installation of solar plants.

“Most farmers have already invested in setting up these plants. If they abandon the projects midway, they will incur losses. If they complete the projects with an unviable tariff, they will still suffer losses,” an association member said.