Bihar raises electricity rates

Last year BSPHCL had proposed to increase tariff by 58.4% to bridge its burgeoning revenue gap

The Bihar Energy Regulatory Commission (BERC) on Friday approved a rise of about seven per cent in electricity rates, effective next month.

Last year, the erstwhile Bihar State Electricity Board (now Bihar State Power Holding Company, or BSPHC) had filed a petition, proposing to increase rates 58.4 per cent, to bridge its widening revenue gap.

“To avoid a tariff shock to customers, a modest overall increase of 6.9 per cent over existing rates has been allowed,” said BERC Chairman U N Panjiar. The rise would fetch an additional Rs 241 crore to the two power distribution companies. BSPHC, however, expects a loss of Rs 3,427 crore during the next financial year.

Urban domestic consumers would be hurt most by this hike as now they will have to pay almost 10% more than the existing charges. Commission has approved an increase of between 25 and 40 paise per unit for urban domestic consumers. BERC has also approved an increase of 20-30 paise per unit (almost 4%) for commercial users.

From next year, Kutir Jyoti , agriculture and other rural power consumers would also have to shell out more. Panjiar said, "The Commission has allowed an increase of 10% tariff hike under the Kutir Jyoti  scheme. Meanwhile, rural domestic power consumers will have to pay only 6.66% extra. Power used for irrigation will now charge only 10% more in urban areas. However, farmers of rural areas do not have been exempted from this hike."

The regulatory body has accepted the high transmission and distribution (T&D) losses remain a big problem for the BSPHCL.

"High T&D losses are a problem which BSPHC should look into urgently. We are doing everything make them cut on these losses. We have approved only 26% T&D losses this year against the pleas of the company for allowing a loss of 38%. Moreover, we have asked them to ensure 100% metering of power consumers by the end of this month."

With 43% power lost during the transmission and distribution process, Bihar has the highest T&D loss in the country. However, the state government has recently signed an MoU with PowerGrid to strengthen its T&D network.