Brain Booster for UPSC & State PCS Examination (Topic: Power Tariffs)

Why in news?

Recently Tamil Nadu Generation and Distribution Corporation (Tangedco) filed a general retail power tariff revision petition with the Tamil Nadu Electricity Regulatory Commission proposing to hike power tariffs by 10% to 35%.

Mounting losses, outstanding loans and the consequent increase in interest burden.
Even after joining the UDAY in January 2017, Tamil Nadu could not bring down the gap between the Average Cost of Supply and the Average Revenue Realised to nil by 2018-19.
On contrary, gap rose to ₹1.07 per unit in 2019-20 against ₹0.6 per unit in 2015-16.
Data indicated, cumulative financial losses going up from ₹18,954 Cr in 2011-12 to ₹1, 13,266 Cr in 2020-21.
Financial support from state govt, allocation of ₹13,108 Cr in this year’s budget.
RBI issued guidelines to banks regarding the lending is to be provided to any state-owned power utility.

Tamil Nadu case is the example of distribution sector in the country.
According to the NITI Aayog’s report, total loss was estimated around ₹90,000 Cr in the financial year of 2021.
Due to these accumulated losses, DISCOMS were unable to pay to generators on time, as of March, 2021 an amount of ₹67,917 Cr was overdue.
For helping these DISCOMS, central govt sanctioned loans of ₹1, 35,497 Cr under Aatmanirbhar Bharat Abhiyan in form of liquidity infusion scheme.
As of Dec 31, 2021 a total of ₹ 1.03 lakh Cr has been disbursed.

In Andhra Pradesh, the power tariff hike took place in Mar, 2022 after a gap of 2 decades for domestic consumers.
In Kerala, the increase came into effect in late June this year after the gap of 3 years.
In March 2022, Bihar Electricity Regulatory Commission issued an order and rejected the proposal for a 9.9% hike.
In Punjab, there is no change in the tariff. From July 01, state has been giving free electricity up to 300 units each month for domestic consumers.
In Tamil Nadu, up to 100 units of free electricity is entitled bimonthly for domestic use since May, 2016.

Tamil Nadu which has been implementing free power supply since mid- 1980s for agriculture sector, has resisted the installation of meters even for fresh connections.
Gujarat is cited as a success story to maintain balance between agriculture and other sectors.
In Manipur, prepaid metering was supplemented with improved power supply, resulting in improved billing and collection efficiency as well as lower commercial losses.
The Madhya Pradesh Electricity Regulatory Commission came out with an incentive package in the area of demand side management.
The general approach of many parties is to use electricity as a tool for their political agenda to gain power.