Hyderabad: The Andhra Pradesh Electricity Regulatory Commission has advised both the state governments to cancel the existing PPAs and enter into fresh PPAs.
This, however, will have cost implications and will result in escalation of power tariffs on both sides. As per initial estimates, the cost hike will be between 20 to 30 per cent. Also, going by the APERC’s advisory to have differential tariffs for each discom, both new states might have four different tariff regimes, with two different tariffs within the same state.
Also the pending Fuel Surcharge Adjustment amounts as well as the ones that have been challenged in court, need to be collected. If the provisions of the AP Reorganisation Act are interpreted to mean that APGenco plants become “inter state plants”, there will be an additional burden on discoms in both the states due to levy of point of connection (POC) transmission charges and losses.
“Since power is dispatched through the regional entities, regional level losses and transmission charges have to be paid. This poses additional burden on the consumers of both the states,” said power sector expert P. Venugopal Rao.
If differential tariffs for each discom are implemented, the burden of inefficiency of the discoms will come on the consumers as tariff calculations are made including the losses. Currently for losses of all discoms put together, consumers across the state have to pay 80 paisa per unit.
