Power tariff hike: People feel discoms proposal is “grossly inflated”

On September 18, the two discoms submitted new tariff proposals and the Aggregate Revenue Requirement (ARR) for 2024-25 to the Commission. They proposed an ARR of Rs. 57,857 crore and projected revenue generation of Rs. 44,835 crore, leaving a revenue gap of Rs. 13,022 crore. The discoms requested this shortfall to be covered by the State government as reimbursement or support for subsidies provided to the agriculture and other sectors.

Hyderabad: People from all walks of life, including representatives of political parties, farmers, industries and general consumers, vehemently opposed the proposed hike in tariff by the Telangana Southern Power Distribution Company of Limited (TGSPDCL) and Telangana Northern Power Distribution Company of Limited (TGNPDCL), at the public hearing organised by the Telangana State Electricity Regulatory Commission (TGERC), here on Wednesday.

The TGSPDCL has proposed an increase in the energy supply tariff to almost all categories of consumers in different forms for the 2024-25 tariff year, which commenced on April 1 this year. New tariff proposals along with the Aggregate Revenue Requirement (ARR) for the year 2024-25 were filed by the two discoms before the Commission on September 18 by proposing the ARR at Rs. 57,857 crore and put the revenue generation at Rs. 44,835 crore, pegging the revenue gap at Rs.13,022 crore seeking it from the State government in the form reimbursement/support in lieu of subsidies extended to the agriculture and a few other sectors. The discoms are estimated to net an additional income of 1,200 crore a year by increasing the fixed charges and other charges.

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Most of the participants at the public hearing found the projections made by the discoms “grossly inflated”. Federation of Telangana Chambers of Commerce and Industry (FTCCI) representatives said the projections made by the Discoms looks over projected and far from reality. They express doubts over the projection of 80,000 million units demand by 2030-31 and asked the Commission to analyse the facts behind the power demand projections made by the Discoms. “Rs. 41,519 crore for next five years projected by the discoms looks inflated. There is a need to closely look into the projections made in the ARR,” FTCCI representative Suresh Kumar said.

He said the motive of the Discoms should be how to provide cheaper power to the consumers rather than putting burden on them by hiking the tariff. “In order to provide subsidised power to domestic consumers, the Discoms cannot put a burden on industries,”he said.

Center for Power Studies representative Venugopal Rao, while opposing the hike proposed by the Discoms, said instead of allowing the hike, the State government should pay Rs. 1200 crore, which the discoms were expecting to get through the hike. The reasons given by the power companies for the increase in true up charges were not reasonable, he said, adding that the proposals of the discoms do not seem fair.

“Why increase the fixed charges by such an amount? What are those proposals for? There is no justification in this,”he said.

Meanwhile, SPDCL Chairman and Managing Director Musharraf Ali Faruqui claimed that the hike proposed by the discoms would not have any affect on poor and middle class households. “We have proposed a slight increase in fixed charges for consumers using more than 300 units per month. This will not put much burden on them. Even HT 11 KV consumers are also not burdened with charges,”he said.