ARR filing to TSERC will be a tight-rope walk for Discoms

Hyderabad: Filing the Aggregate Revenue Requirement (ARR) report to the Telangana State Electricity Regulatory Commission (TSERC) for the next financial year would be a tightrope walk for the power distribution companies.

The Discoms have to file the ARR before the TSERC by the end of this month so that the ERC could give order on the tariff by end of March. With the constitution of the new ERC recently, the Discoms have the responsibility to file the ARR.

The power distribution companies of the State, Northern Power Distribution Company of Telangana Limited and Southern Power Distribution Company of Telangana Limited, have to get the order of the TSERC to collect revenue on the power they sell to the consumers.

The report to be filed in this regard is called the Aggregate Revenue Requirement (ARR).

In the ARR, the Discoms should give details of the expenditure they have to incur on purchasing the power, on maintaining the distribution and transmission systems, on the salaries of the employees, interests to be paid to the banks, on the loans being taken and others.

The Commission reviews the proposals and holds the public hearings and determines the tariff to be collected on the sale of power. The activity begins in November and ends by March. The new tariff order comes into implementation from April 1 of subsequent year.

This year the Discoms may find it difficult to prepare the ARR as it has to satisfy the government and the consumers simultaneously.

The Discoms have to pay about Rs 1,200 crore every month to the power generation companies to purchase power.

This would reach Rs 14,400 crore per year. Apart from this, they have to spend amounts on maintenance of transmission and distribution lines, payment of interest to the banks and on the salaries of the staff.

The Discoms are being provided with tariff subsidy by the government for the free power to farmers. They also get revenue from the government departments for the power they supplied to them.

In order to pay the amounts to the power generation companies, the Discoms have to realise the amounts from the sale of power to the consumers, to government departments and the subsidies of the government.

However, they were unable to get the amounts from the government departments as they owe thousands of crores of rupees. According to sources, the Discoms have to get Rs 5,000 crore from the government departments in terms of the dues.

From this year onwards, the lift irrigation schemes would be made operational and the government has to pay the amounts to Discoms to give power to them.

While preparing the ARR for the next financial year, the Discoms have to calculate all the aspects of the revenue and submit report to the TSERC.