HYDERABAD: While the mercury level in Telangana’s political barometer is still high, the question that remains is — will the State government take the bold step of increasing power tariff for retail consumers, after a gap of five years, when the Huzurabad bypoll is right around the corner?
The revenue deficit for discoms is about Rs 5,000 crore to Rs 6,000 crore. Will the government pass on the burden to consumers or spare them remains to be seen. If the discoms submitted the Aggregate Revenue Requirement (ARR) immediately, the power tariff would be hiked this financial year itself. If the new retail tariff proposals were submitted for next year, then the power tariff hike would have come into effect from April 2022, a year before the Assembly elections.
Though, the State government has been contemplating to hike the power tariff for the last two to three years. However, it did not do so because of back-to-back elections and Covid-19. Now, the government may tread cautiously and strike balance while increasing the power tariff. The burden would be on industrial and high-end domestic consumers, sparing the BPL and middle-class families. Telangana’s domestic power tariff of Rs 1.45 per unit up to first 50 units and Rs 2.60 per unit up to 100 units was the lowest when compared to several other States in the country.
The last time the power tariff was hiked for certain categories of consumers, excluding domestic consumers, was in 2016-17. The State has been continuing the same tariff since then. The average cost of service is around Rs 6, as per the Electricity Regulatory Order issued in 2018-19. Though total requirement for 2018-19 was Rs 30,021.57 crore, the deficit was Rs 5,940.47 crore. The deficit revenue might have increased in the last three years. The options are either increase the subsidy by State government or to increase the tariff.
The government may strike a balance and see that there would not be much burden on the BPL consumers. However, if the discoms are privatised, then the public will have to face huge and sudden burden in future. The power tariff is very high in other States when compared to Telangana.