Centre’s push for simplified power tariff
Telangana has 60 different slabs, Andhra Pradesh 93
The Union Power Ministry has asked state governments to simplify the categorisation of consumers for levying of electricity tariff. The ministry said the multiple categories and tariff slabs that exist across states lead to complexity for consumers.
The ministry said tariff slabs vary from 36 in Tamil Nadu to 93 in Andhra Pradesh. In a circular to states, the ministry said the National Tariff Policy 2016 prescribes that State Electricity Regulatory Commissions (SERCs) be guided by principles of efficiency, transparency, predictability and safeguard of consumer interests while determining consumer categorisation in tariffs.
The high complexity of tariffs in the current scenario due to numerous distinctions across end-users has resulted in multiple basis of categorisation. There is an overall lack of reasonable justification for creating so many categories/sub-categories.
There are two major issues in the current scenario pertaining to categorisation of consumers for levying electricity tariffs in the country. But multiple categories and tariff slabs exist across states. Certain consumers in a subsidised category in one state are not in that category in another.
The ministry said in order to identify and resolve these challenges, as well as proactively implement a solution towards simplifying electricity tariffs, a committee has been constituted under the Ministry of Power for developing a design framework for creation of tariff categories across the country. This will enable uniform and homogenous electricity tariff categorisation based on the national and international review of tariff categorisation methodologies, and various stakeholder consultations.
The committee has recommended that five major consumer categories be formed on the basis of “purpose of use”, namely domestic, commercial, agriculture, industry and institutional. Secondary classification could be subsequently done on the basis of voltage level so as to easily monitor category-wise costs. Further classification based on consumption may be maintained for lowvoltage domestic, commercial and industry sub-categories to provide benefits for low/efficient consumption, discourage high/ wasteful consumption and protect the interests of consumers with low paying capacity.
The ministry said based on the above simplification mechanism, the total number of tariff categories could be restricted to around 15.