Cut in power subsidy hits discoms' plans

Telangana government has given a shock to its energy sector.

Hyderabad: The Telangana state government has given a shock to its energy sector, particularly the power distribution companies, by allocating Rs 4,470-odd crore towards power tariff subsidy for agriculture. While the Telangana State Electricity Regulatory Commission will take a final call on the percentage tariff to be hiked after public hearings, experts in power sector said the discoms will collapse if the state government does not support it financially. The second option would be to hike the tariff in addition to what has already been proposed in the ARR submitted recently to the commission.

In all Rs 5,341 crore was allocated in the 2016-17 Budget to the energy sector. Of this, Rs 4,470 crore is towards subsidy for the power supplied to agriculture sector. The discoms, in the ARR, have projected an expected expenditure of Rs 30,200 crore and anticipated revenue at Rs 21,418 crore, leaving a revenue deficit of over Rs 8700 crore.

“If the tariff hike proposed in ARR is accepted, discoms will get another Rs 1,958 crore but there would still be a gap of Rs 6,831 crore by way of revenue deficit. Discoms have to spend at least Rs 3,500 crore to purchase additional power to ensure day time 9-hour power supply to agriculture. Even the losses of Discoms in 2014-15 and 2015-16 have not been recovered as the amount has not been stated in the ARR submitted to TSERC recently,” said an expert.

( Source : Deccan Chronicle. )
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