Govt may not hike power tariff for four years

Andhra Pradesh chief minister Y S Rajasekhara Reddy is contemplating not to hike electricity charges for the next four years, till the end of the five-year term of the present Congress government in the state.

Reddy, who ensured that there was no hike in tariff last fiscal, has already announced that there would be no power tariff hike during 2006-07.

According to sources in the chief minister's office, based on a discussion with the power sector officials in the early hours of Sunday before leaving for Karimnagar district, the chief minister felt that there should not be any hike in electricity charges during the entire tenure of the present government.

His contention will be followed up with a detailed review shortly. However, an official announcement in this regard will be made only after the municipal elections, which will be over by this month-end.

Copious inflows into various reservoirs of the state that facilitated large-scale hydel power generation and the scope for improvement in the overall performance of the power utilities are stated to be the reasons for the chief minister's proposal for not increasing power tariff till 2009.

Sources said that the state government is also considering to invest about Rs 5,000 crore in the next four years on strengthening the transmission and distribution (T&D) network so as to curtail losses.

A three-pronged strategy for increasing the installed capacity of generation from the existing 11,134 MW to 16,000 MW, reducing T&D losses from the current level of 21 per cent to 18 per cent by 2009 and improving consumer services by establishing sub-divisional consumer centres, has been evolved for eliminating the need for increasing power tariff.

The chief minister's intention, if implemented, will benefit about 80 lakh existing power consumers in both urban and rural areas of the state. The beneficiaries will increase every year as the number of power consumers in the state is estimated to cross 2 crore by 2008-09. The figure includes an estimated 1.5 crore domestic consumers.

"We have promised to the people that there will be no increase in charges and every effort should be made to honour the commitment," the chief minister, according to sources, said when the power sector officials pointed out that funding agencies like the World Bank could raise questions about not hiking power tariff for five consecutive years.