Is power subsidy a long-term solution?
NEW DELHI: Power experts said the Aam Aadmi Party’s (AAP) move to subsidise electricity could not be a long-term solution.
Delhi relies largely on government-run power plants to meet its requirement. Expert said it will be difficult to reduce power expenditure, which is going up by 10 per cent every year.
In a bid to become self-reliant, power minister Satyendra Jain had earlier told HT that the government will request the Centre to allot a coal block so that a dedicated power station can be set up for Delhi.
But sources said this move may hit a hurdle as the Centre does not provide out-of-turn coal blocks. In the next five years, the city’s peak power demand is expected to increase from 6,000 MW to 10,000 MW.
“It is next to impossible to reduce power expenditure. It can only go up. Power tariff can’t be reduced even by a paisa. The UNITS
Without subsidy
Rate with subsidy Those consuming up to 200 units and have been paying`648 will pay `475.2 now
Those consuming up to 400 units with bill of `2,019 will pay `1,117 now public sector generating units sell power to Delhi at the rate of `5 to `6. Operation and maintenance charges are added to it, which is around 15 to 20 paisa. 0-200 201-400
Where will the cheap power come from?,” said a retired power sector official.
Sources said in the past 12 years, the cost of buying power had increased by around 300% but the corresponding tariff hike had been around 90%.
A senior Delhi government official said funds for the subsidy would have to come from some other heads as no allocation had been made in the budget.
Sources in power companies said even if the rates were reduced by 50 per cent, an upward revision by the regulator was likely to increase bills. There are more than 45 lakh power consumers in the city.
Distribution companies had argued that the power procurement cost had been going up for the past few years and needed to be controlled if tariff had to be reduced in Delhi.
“Every year, power procurement cost has shot up by almost 10 percent. Till that is not controlled, tariff will continue to go up,” said a source.