Uncertain demand puts Discoms in a fix

​Hyderabad: Power distribution companies in the State (Discoms) are in confusion over proposing the tariff for various categories of consumers due to the uncertain demand for power in respect of upcoming lift irrigation schemes (LIS) as well as lack of clarity with regard to the related tariff for the next one or two years.

Hence, despite filing the Annual Revenue Requirement (ARR) report to the Telangana State Electricity Regulatory Commission (TSERC), they have desisted from proposing tariff to various categories of power consumers.

Unless the State government makes its stand clear on the tariff to be imposed on LIS, the Discoms would not be in a position to propose the tariff. They ought to be informed clearly about the electricity charges for LIS, sources said.

In its proposals submitted to the ERC, the Telangana State Southern Power Distribution Company has brought up this issue.

The Discom stated that the policy of the Government of Telangana towards supply hours for agriculture and the likely date of commissioning of the lift irrigation schemes (LI Schemes) were important parameters with scope to significantly alter the overall demand projections.

It was also very difficult to predict with accuracy the levels of demand for power from different categories of consumers, especially industrial and commercial. Variations in these components of demand could alter the sales mix and make the ARR substantially inaccurate.

The Discom said that, apart from demand for agriculture and LI schemes, the UDAY scheme of the Centre had also put the power utility in a dilemma over proposing the tariff. For, its accumulated losses, as of March 31, 2015, were Rs 8,061 cr and if Telangana government joined the scheme, these losses might be transferred to the government.

According to the officials of the Discom, the demand for lift irrigation schemes would be about 7,000 MW per annum and it would form a major chunk of the demand for power.

The supply charges for this category would be high and would cause loss to the Discom, unless subsidy was given. So, the State government needs to inform officials concerned of its plans with regard to this category, specifying whether it would be considered ‘commercial’ or ‘agriculture’ demand.

It also should inform the Discom whether the government would foot the bills or pass them on to farmers under the LI schemes. If this category was put in commercial class, the Discoms must be informed as to how much should be charged for each unit. The government should also tell the Discom whether a cross subsidy would be provided.

The Discom said that a growth rate of 10.83 was observed in agriculture sales during the financial year 2016-17, over FY 2015-16.

This higher growth of sales was on account of 54,717 of agricultural service connections released in 2015-16, against the target of 50,000, in addition to the extension of 9-hour power supply to agriculture consumers.

Further, the target for release of agriculture connections for 2016-17 was 64,730. Considering the same per HP consumption for the coming year and keeping in view the increase in the number of agricultural connections, a growth rate of 6.50 was adopted for projecting sales in 2017-18.