AP power regulator raises 5% tariff for industries

Domestic consumption of up to 200 units; agri services spared from hike

The industrial tariff across most of the sub-categories in Andhra Pradesh will be hiked by 25-30 paise per unit from April 1, 2015, under the tariff order issued for the year 2015-16 by the AP Electricity Regulatory Commission (APERC) on Monday.

The commission said it had allowed only 5 per cent increase in the tariff as against the 6 per cent hike proposed by the AP discoms.  

Further, it said only 8 per cent of the 15.5 million electricity consumers in the state will be affected by the tariff revision, realising an additional revenue of around Rs 950 crore versus Rs 1,265 crore proposed by the power utilities. All the households that consume up to 200 units of power per month in addition to the agriculture services among few such categories were completely excluded from the tariff hike, according to the commission.

“Poor people were consciously excluded from the tariff hike as they can not be burdened with additional charges,” APERC chairman G Bhavani Prasad told reporters here on Monday.

It may be recalled that the industry bodies in the erstwhile Andhra Pradesh had raised serious concerns in 2013 over the state having the highest power tariff across the country, though it remained the same in the second year due to the political turmoil involving the state bifurcation.

Since the tariff revision was only confined to the industries along with certain other categories including the commercial establishments, which already pay higher tariff compared to other segments of consumers, the increase has still been handsome as the 5 per cent hike was calculated on the existing unit price levied from the industry. Domestic consumers using more than 200 units power will also come under the tariff hike for the additional consumption.

The electricity regulator has determined the aggregate revenue requirement (ARR) of Rs 25,515 crore for supply of Rs 47,386 million units of power during the year. Of this, the commission has allowed the companies to raise Rs 22,329 crore from the retail sales as per the revised tariff structure, while asking them to collect Rs 3,186 crore from the state government by way of subsidy, which incidentally remained at the same level as last year.

“We have achieved this reduction compared to the tariff proposals by reducing around 3,098 million units from the 11,000 million units of surplus power asked for by the two Discoms,” Bhavani Prasad said in response to a question.

The regulator has allowed a demand growth of 16 per cent over that of the current financial year, which appears to be on the lower side considering the 24/7 power announced to all the consumers in the state from October 2014.

The commission chairman said that they would be studying all the other suggestions received on the tariff pattern during the public hearing, separately.