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Power tariff hike likely to shed load of revenue deficit

Trudging under a huge revenue deficit burden, the energy utilities in the State have kept their fingers crossed over the quantum of assistance they are likely to receive from the government in the form of subsidy for the next financial year. Given the situation, the authorities would go for a marginal tariff hike for some sections to offset the deficit, official say.

With a huge deficit of Rs. 5,148 crore, the Transmission Corporation of Andhra Pradesh (APTransco) is gearing up to present the tariff proposals to the AP Electricity Regulatory Commission (APERC) around Sankranti. It is hopeful that the government subsidy towards the free power supply scheme to farmers and other concessions to households with low consumption could be of the order of Rs. 3,200 crore.

This would, however, leave a revenue gap of close to Rs. 2,000 crore, making it inevitable to enhance power tariff. The government will take a decision on the quantum of assistance once the tariff proposals are submitted. “The government subsidy apart, the regulator will try to prune the requirement to some extent. Yet, we are likely to be left with a significant deficit,” a senior official said.

While there was no tariff hike for the last couple of years, the utilities were forced to meet the additional expenditure incurred on different counts. The cost of supply, for instance, is projected at Rs. 5.60 per unit while the Transco was able to realise Rs. 4.59 a unit, marking a gap of Rs. 1.01 for every unit of power supplied to consumers.

Senior officials of the Energy department claimed that they would be forced to effect at least a marginal hike for some sections to offset the deficit in the revenues. Accordingly, proposals were being prepared to ensure that the poor and lower income groups were not affected by the tariff hike. “In fact, some section of consumers could see a reduction in tariffs. The hike, if permitted, will be limited to a section of consumers,” a senior official told.

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