The Hindu Business Line : No power tariff hike in AP next fiscal

Electricity consumers in Andhra Pradesh are in for yet another year of no tariff hike regime following submission of annual revenue returns (ARR) with the Andhra Pradesh Electricity Regulatory Commission here.

If the tariff hike were not effected as per plans, power consumers across various categories in the State would have a fourth year in succession without any tariff hike.

According to a statement from the Transmission Corporation of Andhra Pradesh (AP Transco), there would be no change in tariff structure for all consumer categories for fiscal 2006-2007 and the accent would be on bringing in internal efficiencies, including cut in transmission and distribution (T&D) losses.

This is based on ARRs and tariff petitions filed by AP Transco and Distribution companies before the APERC on Thursday.

For the ensuing year, the sector revenue gap is projected at Rs 1,622 crore. However, the licensees have proposed to pass the savings due to the hydel generation in the current year to the consumers.

By current estimates, this amounts to Rs 235 crore. Net of this amount, the sector revenue gap is Rs 1,387 crore for the ensuing year. This is before taking into account the State Government subsidy for the sector. The tariff order of APERC provided a subsidy of Rs 1,352 crore.

However, Transco and Discoms have managed to keep costs under control and have now proposed to reduce the T&D losses for the ensuing year 2007-2008 to 18.17 per cent, which means a reduction of about 1.52 per cent from the current levels. While such a move would mean among the lowest T&D losses in the country, the savings would result in an additional amount of Rs 188 crore.

The AP Transco has said that the utilities have set a target to improve metered sales by 10.5 per cent through sustained efficiency improvements and this will lead to a further net improvement of Rs 131 crore. The combined effect of loss reduction and revenue improvement initiatives will provide Rs 319 crore, which the utilities are using to meet the difficult situation.

The AP Transco has maintained that if one adjusts for inflation, the power tariffs have actually reduced in real terms.

The current tariff level for the domestic category at Rs 2.35 per kilo watt hour has remained constant for the last few years and actually this represents a reduction of 17.5 per cent if inflation is taken into account.

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