Bihar power shock: BERC increases electricity tariffs by 55%

Sharpest ever rise after no revision in 3 yrs; move likely to boost Discoms' kitty by Rs 4,700 cr

Bihar's power tariff revision, which comes after a three-year status quo on prices, has come as a  shocker to consumers. The Bihar Electricity Regulatory Commission (BERC) has approved an unprecedented 55 per cent increase in electricity tariff. The hike is expected to boost distribution companies' (discoms) kitty by Rs 4,700 crore.

From next month, consumers will have to shell out Rs 2.75 to Rs 3.65 more per unit under the approved tariff for the next financial year. "The discoms have proposed an overall hike of about 84 per cent in the tariff for FY18, whereas we have approved an increase of about 55 per cent without taking the state government's subsidy into account," said BERC chairman S K Negi.

"However, if the state government extends subsidy to BPL (below poverty line) and rural consumers as agreed in the Ujjwal DISCOM Assurance Yojna (UDAY), the increase may come down to around 28 per cent only," he added.

However, even after the adjustment of subsidy into the revised tariff, it would still be the sharpest ever increase in power tariff. With no change in Bihar electricity tariffs during the past three years, discoms have been struggling with unsustainable financial burdens due to their increased consumer base by more than 4 times. Moreover, rising coal price also contributed to the cost.

"The retail tariffs of the Kutir Jyoti, rural domestic and non-domestic consumers and agriculture consumers have increased proportionally higher. It's because of the fact that this year the state government has not announced any resource gap funding. Therefore, we had to determine these tariffs without any subsidy," Negi told newsmen on the question of highest ever increase.

"Moreover, we had to align distribution loss trajectory with that of the UDAY scheme. Higher transmission charges due to expansion in the grid and transmission network have also played an important role in the new tariffs. DISCOMs now also have to make higher provisions to meet Renewable Power Purchase Obligation (RPO). Most importantly, we also had to take into account Appellate Tribunal for Electricity (APTEL) decision regarding the current FY tariffs in which it asked us to reconsider eight issues of contentions and pass fresh orders," informed the BERC chairman.

To promote the online payment of bills, the BERC has approved additional rebate of one per cent in addition to the existing rebate of 1.5 per cent for timely payment.