Get ready to pay more for power
Navneet Sharma [email protected]
CHANDIGARH:

DOUBLE WHAMMY Discoms submit fuel surcharge claim of R1,560 cr for FY 2010-11, govt considering revising tariffs too

In a double whammy for the electricity consumers, Haryana power distribution companies, which recently sought the government nod to start the process of revision in energy charges, have submitted an application to Haryana Electricity Regulatory Commission (HERC) for imposition of fuel surcharge on the consumers to recover additional Rs 1,560 crore incurred on power purchases last year.
The fuel surcharge adjustment (FSA) application submitted by the two state-owned power distribution companies, Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN), last week is on account of additional liability of roughly Rs 1,560 crore incurred on short-term power purchases during financial year 2010-11, according to sources.

It includes “holding cost“ of Rs 300 crore for delayed or stag

gered recovery of the surcharge.
HERC, which is presently without a regular chairman, is expected to take up the FSA application on priority as the discoms are under tremendous financial strain. If allowed, the FSA claim, which is mainly expenditure incurred on shortterm purchases made last year, would translate into surcharge of 40 paise per unit to be recovered from the consumers of all categories over a period of one year.

While the state government gives subsidy to shelter the elec

tricity consumers in the farm sector from fuel surcharge and tariff hike, the consumers of other categories would have to shell out more for power. “The discoms neither make their demand-supply projections properly nor plan purchases as per the requirement. They have to make short-term purchases at much higher rates. That's why higher expenditure is incurred to meet the demand,“ a sector expert said.
At present, the power consumers of different supply categories except agriculture are

paying FSA between 15 paise per unit and 37 paise per unit.
The domestics supply consumers with consumption above 301 units per month pay the highest fuel surcharge.

Last month, UHBVN and DHBVN, which are facing liquidity crunch, also requested the government for a “bail out“ package and permission to move an application before the regulator for a revision in tariffs in the state.

Power minister Capt Ajay Singh Yadav told HT on October 15 that the discoms have been asked to study the power rates in Delhi and Punjab.

“Our tariffs are lower. As there is scope for increase, the government is seriously considering revising tariffs,“ the minister said.

Now, the Centre has also asked the state governments to increase electricity charges to improve the financial health of power distribution companies, which are facing difficulty in raising funds from banks on account of poor balance sheets.