Govt must subsidise cheap power: Reliance Infra

Burdened by higher power purchase cost and lower bill structure, Reliance Infrastructure, which has a controlling stake in three power distributing companies (discoms) in Orissa, has suggested that the government should provide subsidy if it wants to provide cheap power to people.

"BPL (below poverty line) families and farmers in Orissa are getting electricity at 75 per cent lower price than other consumers and the gap is funded by us (discoms). So the government should give subsidy,” A K Bohra, chief executive officer of Nesco, Wesco and Southco said at the Electricity Odisha 2012 seminar organised by the Utkal Chamber of Commerce and Industry (UCCI).

BPL families in the state consuming upto 30 units per month pay one rupee per unit and agriculture and allied industries are billed Rs 1.10 for each unit while the average cost of power amounts to Rs 4.08 per unit. Orissa produces about 1,800 Mw energy from several thermal and hydel plants.

It is an irony that the state government insists on providing cheap power to economically backward population, but has not taken any steps neither to provide subsidy money nor to allow increase in power tariff, alleged Bohra.

Even though power tariif in Orissa is decided by the Orissa Electricity Regulatory Commission (OERC), the state government takes active part in influencing the tariff structure. Last year, the government had opposed the power tariff hike order of the OERC for 2011-12 and had submitted a review petition before the commission.

The OERC, though rejected the state government's review petition, had suo mouto made some changes in the 2011-12 tariff structure.

According to Central Electricity Authority (CEA) estimates, Orissa currently needs 21,916 million units (Mu) power annually and by 2013-14, it would be requiring 33,169 Mu. Hence, the government must allow tariff hike to ensure better quality power supply, Bohra suggested

"There is a need to hike power tariff as people should understand that electricity is a commodity and they have to pay a price for it. Rising power prices will help in economising power consumption and thus will help in developing the quality of power supply,” he suggested.