Revise power tariff periodically, Centre tell states

The Centre has asked the state electricity regulators to revise power tariffs periodically and to ensure that electricity distribution companies cut power theft and operational costs to prevent utilities from becoming sick.

In its presentation to the forum of state electricity regulators here recently, the Ministry of Power has highlighted them about the need for timely revision of tariff as the government is working for giving fresh lease of life to loss making power utilities. While highlighting the outstanding loan liabilities of state-run power utilities of Rs 4.3 lakh crore, which are mainly due to inefficiency of distribution companies and delays in tariff revision, the ministry said the regulators should also ensure that the states must takes steps to prevent pilferage, a senior official told Deccan Herald.­

Cut down pilferage, increase the efficiency of Discoms and revision of tariff were part of the tripartite agreements being signed by states, their power utilities and the ministry under the Ujwal Discom Assurance Yojana (Uday).

 “Uday” was launched by the Centre as a bailout package for loss making Discoms.As per “Uday”, the respective state governments have to take over the loan and in turn they were allowed to issue bonds. States are suggested to take over 75 per cent of discom debt as on September 30, 2015 over two years — 50 per cent in 2015-16 and 25 per cent in 2016-17. 

The state will issue bonds for the same. For the next two financial years, the Centre will not include the debt taken over by the states in the calculation of their fiscal deficit.

The states, which wanted to get the benefit of the scheme have to meet certain conditions, including 100 per cent metering of all its consumers and plug theft, reduce their technical and commercial losses to 15 per cent by 2018-19 against existing national average of 22 per cent.