Meghalaya govt proposes 90 pc power tariff hike

The Meghalaya government has proposed a whopping 90 per cent hike in power tariff to meet sky-rocketing purchase and transmission cost of power it projected over Rs 600 crore for 2014-15, Chief Minister Mukul Sangma said today.
"The Meghalaya Public Distribution Corporation Ltd (MePDCL) has proposed an increase of only 89 per cent and not 500 per cent as reported, in a tariff petition filed before the Meghalaya State Electricity Regulatory Commission for the financial year 2014-2015," Mukul said in the state Assembly.
Replying to a call attention moved by Garo National Council member Clifford Marak, he said the cost of purchase of power for 2014-15 is expected to touch Rs 489 crore (Rs 4.7 per unit) and the transmission cost would be Rs 124 crore (Rs 1.24 per unit) apart from the salary of employees and maintenance.

Stating that the present power tariff is lower than Assam (Rs 3.58-Rs 6.15 per unit), West Bengal (Rs 3.75-Rs 6.9 per unit) and Tripura (Rs 4.11-Rs 7.96 per unit), Mukul said the cost per unit in Meghalaya is Rs 2.6 up to Rs 3.75.
Defending the move to hike the present tariff with an increase of almost 90 per cent, the Chief Minister said the hike is essential so that the corporation is able to meet its expenditure to sustain its operations and thereby continue to serve its consumers and the state.
He also said that the government estimated that 57 per cent of its revenue in the financial year 2014-15 will be required to meet the power purchase cost alone.

"The total power purchase cost of MePDCL is expected to be Rs 489 crore for the financial year 2014-15, and it is estimated that Rs 4.7 per unit of revenue will be required to meet the power purchase cost itself," he said.

Mukul, who replied on behalf of Power Minister Clemen Marak who skipped the session due to bad health, also reasoned that consumers in the state had to pay more for an increase per unit because the growth of energy consumption has been nominal.
He also said that gross subsidy from factories to ease the burden on domestic consumers was also not available as their numbers was less.

Further he said the Electricity Act 2003 and National Tariff Policy has now provided that discoms (distributing utilities) are required to gradually decrease the level of gross-subsidy, which effectively would mean that tariff for domestic consumers will increase to higher rates.
The Chief Minister also informed that for the financial year 2012-13, the fixed cost for services was 77 per cent as against fixed revenue of only 5 per cent of total revenue.
"This shows that the fixed cost is very high in proportion to the total cost, which the discom has not been able to meet in case of sudden reduction of energy demand as the fixed revenue is very low," he said.