The Hindu : Andhra Pradesh News : Differential power tariff likely in Andhra Pradesh

Online edition of India's National Newspaper
Thursday, Jun 16, 2005

Andhra Pradesh

Andhra Pradesh

Differential power tariff likely in Andhra Pradesh

M. Malleswara Rao

Transfer of Power Purchase Agreements amid protests

HYDERABAD: Power consumers falling under different distribution companies (Discoms) may end up paying differential tariffs even if they belong to the same category because of the transfer of power purchase agreements from AP Transco to them.

Consumers will receive the first shock under the new regime under which the Discoms will file the tariff proposals for next year before the Andhra Pradesh Electricity Regulatory Commission (APERC). The AP Transco which has handled this job so far will restrict its proposals to transmission tariff and wheeling charges payable by the Discoms. Each Discom is likely to have its own tariff structure depending on its balance-sheet influenced by unavoidable factors.

These factors include the percentage of agriculture and rural consumers whom they serve and who require subsidies, the level of transmission losses depending on the distance between the generation station and the distribution point, the age of the power station which decides the plant load factor and the type of fuel used. Unless the Government insists on a uniform tariff rates at least as a political compulsion and releases subsidy to the under performing Discoms, different tariff rates for the same category of consumers will become inevitable.

The APTransco wanted a power trading company to be floated as single buyer/ seller of power to which the power purchase agreements (PPAs) could be transferred. But, the APERC bulldozed not only this proposal but also the petitions by experts, citing the compulsive nature of Electricity Act 2003. It did not hold a public hearing on the vital issue indicating that the power of regulatory body was powerless if there is insistence by the Centre on a particular issue. A plea by the Chief Minister, Dr. Y. S. Rajasekhara Reddy, to postpone the transfer by a year was not heeded by the Centre. The experts recall how the tariff had gone up several fold in California under discom concept. The transfer came at a time when there were as many 30 petitions pending before ERC, some of them by the Transco CMD, Rachel Chatterjee, on several issues plaguing the power sector.

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