The Andhra Pradesh transmission company, Aptransco has informed the state electricity regulatory commission that it is willing to do away with non-telescopic power tariff, provided the new structure is revenue-neutral.
The move will put an end to absurd instances of consumers being forced to pay hundreds more for just one extra unit of power.
Several consumer bodies have contended before the commission that the non-telescopic structure encourages corruption among staff as well as consumers.
In its reply, Aptransco said the structure was introduced in December 1992 mainly to discourage high consumption, since power was highly subsidised, particularly for the lower slabs.
Acknowledging the difficulty arising in cases where the consumption was at the threshold of a slab, Aptransco suggested that the consumer could stabilise the consumption at a level well below the slab limit. However, it was made clear that transmission and distribution companies had no specific preference for any type of tariff structure, provided revenue neutrality was maintained.
Under the tariff proposals of Aptransco the domestic sector is subsidised by Rs 930 crore. This was estimated based on an expected consumption of 6,251 million units (mu). The cost of supply is Rs 3.72 per unit, while the proposed tariff will give an average of Rs 2.24 per unit.
After the proposed 50 per cent hike in tariff for monthly consumption up to 200 units, 43 per cent for consumption up to 300 units, 21 per cent for consumption up to 400 units and a 15 per cent hike for consumption over 400 units, the subsidies are as follows: Up to 50 units section consumes 1,639 mu and subsidy of Rs 2.52 per unit works out to Rs 413 crore per annum. Up to 100 unit section consumes 1,454 mu and subsidy of Rs 1.92 per unit adds up to Rs 279 crore per annum. Up to 200 unit section consumes 1,435 mu and at Rs 1.22 per unit subsidy coming to Rs 175 crore. Up to 300 section consumes 805 mu and at Rs 72 paise per unit, the subsidy involved is Rs 58 crore. Above 400 unit consumption adds up to 918 mu and involves no subsidy.
If a telescopic tariff structure is to be introduced while maintaining revenue neutrality, the tariff for consumption up to 200 units may have to be increased more than the proposed rates. At present, even the proposed tariff at the lower levels is less than the existing tariff in many other states. For higher consumption levels, however, the tariffs in Andhra Pradesh are much more than in other states. A telescopic tariff structure will bring the rates for domestic consumers more in line with those in other states in the country.
Meanwhile, having come under severe criticism on the extent of energy losses, Aptransco has disposed before the Regulatory Commission that it will bring it down from the present 38 per cent to 17 per cent by the year 2010. This is a clear and a major victory for all the consumer groups that contended that not only the level of energy losses is far too high, but that the utility has not made any commitments on bringing down the losses to acceptable levels over a period of time.
In the Filing of Proposed Tariff, all that Aptransco had stated was that on basis of energy losses of 35.4 percent there would be a revenue deficit of Rs 3,461 crore this year in absence of tariff hike and subsidy from state government. It claimed that the deficit has been reduced by Rs 500 crore through internal efficiency improvements like reducing line losses.
Aptransco claimed in an affidavit filed before the Commission on May 12, that the losses for the year 1999-00 are estimated as 36.9 per cent and that technical losses constitutes 24 per cent and the balance is commercial losses.
