Hyderabad: The new tariff order and the final ruling of the Andhra Pradesh Electricity Regulatory Commission (ERC) showed a huge gap in the estimates by the two distribution companies and what the Commission finally agreed to for the financial year 2015-16. This gives rise to speculation whether the power utilities were trying to fleece the consumers.
A perusal of Annual Revenue Requirement (ARR) shows that overall energy requirement for the next financial year 2015-16 was set at 58,191 million units (MU), but the ERC trimmed it to 54225 MU.
The proposed sales were 50,485 MU, but the approved sales were 47386 MU.
The ARR proposed by the utilities was Rs 30,308 crore, but the Commission reduced it to Rs 25,515 crore — a difference of Rs 4,793 crore.
These figures prove that the discoms’ estimates were increased, and if they were approved by the ERC, it would have been a huge burden on consumers.
Justice Bhavani Prasad, chairman of the Commission, explaining the huge trimming exercise, tried to play down the difference stating that the companies showed higher requirements naturally, but they would not be accepted. “It is like the variation of cost according to times. If the rent of a house is Rs 10,000, it may go up to Rs 11,000 next year. The discoms’ approach is also like that,” he said.
‘Burdensome’ plans spiked
The Commission has also not approved the cost side assumption of '567.15 crore as a short term power purchase burden. M. Venugopala Rao, convener, Centre for Power Studies, raised this key aspect in one of the objections filed before the ERC on the proposals.
The two Discoms had stated that they would have to purchase 2,275 MU between January and March 2016 and again from July to December (1,501 MU) to meet the peak demand. They also stated that the surplus short-term power, estimated at around 1,1087 MU could be sold in the Southern power exchange or any other state that wanted to buy it.
