There may be more bad news ahead for the people, as power distributors across the country face the dilemma of raising tariffs sharply or defaulting.
State utilities need to hike tariffs in the 8-24 per cent range to bridge the revenue gap and avoid default, according to an analysis done for the Government by global consulting firm Mercados EMI.
Among highest globally
This is going to miff the consumers, considering that even without these hikes, they pay among the highest tariffs in the world.
In purchasing power parity (a measure of long-term equilibrium exchange rates based on relative price levels of two countries) terms, Indians pay the most for power than even consumers in the US, Japan, Germany, Brazil or China.
According to Planning Commission data, the retail power tariffs were the highest in India at 30.8 cents a unit in purchasing power parity terms in 2002.
Japanese consumers paid 15.3 cents a unit, Germans 9.5 cents, Americans 7.7 cents, Brazilians 27.6 cents and the Chinese 20.6 cents.
In India, for much of the last five years, the majority of distribution utilities have delayed filing tariff petitions before the designated State power regulators to avoid the unpopular step of hiking electricity tariffs.
Tariff petitions
This was largely because most of these utilities are State-owned and the decision to not file tariff petitions was mostly under direction from the governments of the day.
Now, amid mounting losses, some States such as Punjab, Bihar, Rajasthan and Delhi have decided to bite the bullet to ensure that the power distribution sector remains financially solvent.
The problem could get compounded in the coming years, as increasing use of imported coal and spot gas in generation stations across the country translates into greater financial stress for the distribution sector.
During the last couple of months, Punjab has raised power tariff by 9 per cent on an average, Bihar by 19 per cent, and Delhi by over 20 per cent.
Losses incurred
According to industry estimates, in about five years, India may be forced to import almost 30 per cent of the total coal required to meet its electricity needs, compounding the worries for the distribution utilities.
For 2010-11, the losses suffered by the country's distribution utilities are estimated at Rs 70,000 crore.