Power tariff hike on cards
Rakesh Lohumi
Tribune News Service

Shimla, December 11
Electricity charges in the hill state are likely to go up sharply with the state electricity board proposing a steep hike in the tariff structure in the aggregate revenue requirement (ARR) for 2009-10 filed with the electricity regulatory commission.

As against the expenditure of Rs 2021 crore approved by the commission for the current financial year, the board has projected a revenue requirement of Rs 2853 crore for 2009-10, a hike of over 40 per cent. If approved, the average tariff will shoot up from Rs 3.68 per unit to Rs 4.60 per unit, the brunt of which will have to be borne by the domestic consumers as the power subsidy has been frozen at the level of Rs 140 crore under the agreement signed by the government with the World Bank for availing Rs 900 crore development policy loan.

The highest increase has been projected in the employees cost which is to go up from Rs 510 crore to Rs 839 crore on account of the likely implementation of pay commission report during the year. In the multi-year tariff the commission had approved an employee cost of Rs 539 crore for 2009-10. Consequently, the employee cost, which is already highest in the coutnry at Rs 95 paise per unit, will jump to Rs 1.50 paise per unit as per the projections.

The other major factor contributing to the increase in expenditure is the high cost of power purchase due to declining surplus. The commission had approved Rs 1310 crore for power purchase for the current year against which the board will have to spend Rs 1519 crore as per revised projections. The projected requirement for power purchase for 2009-10 is as high as Rs 1640 crore, mainly because the state has been left with little surplus power due to sharp increase in demand for industrial power over the past three years. It has been left with no option but to purchase more power from other state at very high rates to meet the shortfall during the lean winter months.

The total availability of power has been projected at 6900 million units, out of which 6200 million units will be sold within the state. The quantum of surplus power available for sale outside the state will decline from 1330 million units in the current year to 684 million units in 2009-10. The committee expenditure on account of payment of interest on loans will go up from Rs 174 crore to Rs 209 crore. The commission will announce the tariff after conducting public hearing by March next.

The board and the consumers will have to pay for the wrong policies of the government to encourage poor intensive units as a result of which the state is forced to purchase power from outside the state at exorbitant rates and supply it to industrial units at rates much lower than average selling rate.