Financial Daily from THE HINDU group of publications
Tuesday, Mar 25, 2003
Industry & Economy
AP electricity panel cuts industrial tariffs
HYDERABAD, March 24
THE Andhra Pradesh Electricity Regulatory Commission (APERC) has reduced the tariffs for industry (HT-1) by 2.96 per cent from Rs 3.71 per unit to Rs 3.60 per unit for the year 2003-04.
The commission has also reduced the unit rate of power supply to railway traction from Rs 4.6 per unit to Rs 4.5 per unit. It has retained the domestic tariffs at the current level. There is an overall decrease in tariffs by 0.74 per cent.
In its tariff order for the next fiscal, APERC stated that the industrial tariff was reduced keeping in mind the need to spur industrial growth within the State and rationalise tariffs in line with cost to serve. If inflation was taken into consideration, the reduction in industrial tariff would be 7 per cent and railway traction tariff would be 6 per cent.
The APERC order stated that the net revenue requirement of the Transmission Corporation of Andhra Pradesh (APTransco) and the four power distribution companies (DISCOMS) for 2003-04 would be Rs 9,780.75 crore and the expected revenue from charges would be Rs 8,031.84 crore, leaving a revenue gap of Rs 1,748.91 crore.
The commission had directed the DISCOMS to achieve efficiency gains of Rs 295 crore. This would leave a revenue gap of Rs 1,453.91 crore.
However, on account of reduction in tariffs for HT-1 and railway traction categories the revenue gap would increase to Rs 1,513.49 crore. The State Government had agreed to fill the entire revenue gap through subsidy.
In the non-domestic category (commercial), for the first slab of 0-50 units, the earlier tariff of Rs 3.95 per unit has been retained. For the other slab of above 50 units, the tariff has been fixed at Rs 6.60 per unit as against the current tariff of Rs 7 per unit for over 100 units.
For seasonal industries such as pisciculture and sugarcane crushing, the benefit of declaring off-season period was introduced. Accordingly, during the off-season period, the demand charges for the consumers would be recorded demand or 30 per cent of the contracted demand whichever was higher. The unit rate would be Rs 4.50 for all units consumed.
The other salient features of the APERC tariff order, according to its Secretary, Mr T. B. Narasimha Rao, are that projected transmission losses of 7.25 per cent have been reduced to 7 per cent. The system losses reduction target has been reset at 24.63 per cent in place of 24.85 per cent projected by APTransco. Reasonable return at 16 per cent has been provided for APTransco and all DISCOMS. The metered tariff for agriculture category will be fixed for a period of three years provided the meters are fitted before June 30.
The Rs 115-crore excess expenditure due to wage revision during 2002-03 has been provided as a special appropriation in the aggregate revenue requirement of next fiscal.
At the current tariffs, APERC points out, against the total cost to serve of Rs 3,804.52 crore for the domestic category, the cross subsidy is Rs 1,017.60 crore and the Government subsidy is Rs 729.97 crores. The new domestic tariff fetches 51.88 per cent of the cost serve.
For agriculture, against the total cost to serve of Rs 2,051.31 crore, the amount of cross subsidy is Rs 926.61 crore and the Government subsidy is Rs 664.7 crore. The new level of tariff represents 17.7 per cent of the cost to serve the agricultural category.
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