Centre: Revise power rate quarterly

If the Central government had its way, the power tariff would change once in every three months, similar to the model adopted for petrol and diesel.

The quarterly revision in the power tariff by regulators is one of the conditions imposed by the Central government as part of the Ujwal Discom Assurance Yojana (UDAY), which seeks bailout debt-ladden power distribution companies in states, including Telangana and AP. Joining the UDAY scheme, however, was optional for the states.

According to the Central government, the provision of quarterly revision of power tariff will reduce the high cost burden borne by discoms. “It will be easier to implement the new tariff and could be absorbed by consumers without much difficulty as the quarterly change would typically be small,” a Transco official said, explaining the Central government’s stance. At present, the power tariff is revised only once in a year by the power regulators. However, the Centre feels that the regulators cannot pass on the inefficiency of Discoms to consumers.

The Telangana government, Transco officials claim, would be free to implement the revision or not to do so.

After the entry of private power producers, the cost of power has come down drastically. Now the power is available at less than `2 per unit. During the night when the power demand plummets, the cost of power gets reduced by 50 per cent.

Sometimes, the power could be bought for `1.80 per unit from private power units. However, the Discoms charge the same rate throughout the year.

While the average cost of power purchase from private producers is less than `4 a unit, Discoms are collecting more than `5 per unit.