APERC cuts tariffs for 5 categories of HT, LT consumers

The new tariff order issued by the Andhra Pradesh Electricity Regulatory Commission (APERC) has cut power tariffs for five categories of HT and LT consumers.

The move to cut tariffs will see APTransco suffering a revenue loss of Rs 120 crore in the next financial year.

This is the second consecutive year that the regulator has effected a marginal reduction in tariff to these categories which have for long been cross-subsidising domestic and agriculture consumers in the state.

APERC has adopted a philosophy of gradual rationalisation of tariffs with the total elimination of cross subsidies as the ultimate objective.

While the reduction was a uniform 10 paise per unit for the four categories, a 35 paise reduction has been allowed on the second slab of LT -2 category(non domestic).

According to the tariff order, the energy charges have been reduced from Rs 3.60 paise to Rs 3.50 paise per unit for the HT Category-1(Industrial), from Rs 4.50 paise to Rs 4.40 paise to HT Category-2 (others), from Rs 4.50 to Rs 4.40 for the railway traction (HT Category- 5) and from Rs 3.85 paise to Rs 3.75 paise for the LT-3 (A&B).

With regard to the LT-2 (non-domestic) category, the regulator has reduced the charges from the existing Rs 6.60 paise to Rs 6.25 per unit of the second slab (above 50 units) while retaining the earlier tariff of Rs 3.95 per unit for the first 0-50 unit slab.

The regulator has not touched the demand charges which would continue at current level for these categories.

The tariff would remain unchanged for domestic, cottage industries, local bodies, general purpose, LT and HT temporary category, and HT-private lift irrigation schemes for the next financial year, despite a decrease in government subsidy.

In another major decision, which has special significance on the eve of elections, the APERC has brought the traditional professions of blacksmiths, carpentry, goldsmiths, kanchari and pottery having a connected load of 5 HP and below into the LT-4 category (cottage industries).

Under this category, which is currently available for only Dhobi Ghats, Rs 1.80 paise would be collected on each unit consumed. These craftsmen traditionally belong to the backward classes of the society and are the main support base of the ruling party.

In its annual tariff order for the year 2004-05 issued on Monday, APERC has asked APTransco to achieve internal efficiency gains of Rs 300 crore for the next fiscal while fixing the net revenue requirement for the main utility and the four distribution companies (Discoms) at Rs 9,353.45 crore.

Interestingly, the annual revenue gap has been considerably reduced this time to Rs 1,303 crore which would be borne by the state government by way of subsidy. This is considerably lower than the current year's subsidy of Rs 1,513 crore.

"This was possible because of the reduction of power purchase cost by Rs 453 crore beside asking for efficiency improvement to the extent of Rs 300 crore," S Suryaprakash Rao, secretary of APERC, explained while addressing a press conference. The bulk supply tariff has been reduced by about 10 paise per unit to Rs 1.99 paise (average of all Discoms) for the next financial year.

The regulator has fixed the transmission charges receivable by the APTransco at Rs 84.65 paise per KW per month while reducing the transmission losses from the existing 7 per cent to 6.25 per cent for the year 2004-05.

Thus, the overall system losses for the next financial year would come down from 24.63 per cent in the current fiscal to 23.6 per cent in 2004-05.

According to the order, the power utilities will raise Rs 8,051 crore through tariff revenues and Rs 1,048 crore from the non tariff revenues.

The tariff order put the overall availability of energy for the next financial year at 50,000 mu. But the actual purchases for the entire year would be 44,800 mu. The regulator has allowed the power utility to sell about 1,114 mu to other states while providing a five per cent spinning reserve for the state grid.

Of the total purchases, hydel contribution is fixed at 6,423 mu. About 11,450 mu consumption has been budgeted for agriculture consumption in the next financial year which is slightly higher than the current projection.

APTransco is expected to earn about Rs 40 crore as return on equity while the four Discoms are expected to get Rs 20 crore each.

APTransco in its annual revenue requirement (ARR) and tariff proposals for the year 2004-05 to the regulator submitted in last December, had showed a revenue gap of gap of Rs 1,535 crore which was on par with that of the previous year.