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Home News Power Sector News Delhi power tariff hiked, govt gives subsidy to stay in power

Delhi power tariff hiked, govt gives subsidy to stay in power

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DelhiThe Delhi Electricity Regulatory Commission (DERC) Friday hiked the power tariff in the capital by 5 percent at a time when electricity rates have become a major election issue. The new charges come into effect from Aug 1.

Delhi's Congress government, set to face assembly polls in November, quickly announced that it will provide concessions to households consuming up to 400 units.

This, an official statement said, would cover 84 percent of all domestic consumers.

The DERC hiked the tariff for those consuming up to 200 units -- the lowest slab -- from Rs.3.70 to Rs.3.90 per unit. Between 200 and 400 units, the tariff rose from Rs.5.50 to Rs.5.80 a unit. Beyond 400 and up to 800 units, the price of power will rise from Rs.6.50 to Rs.6.80 a unit. Consumption above 800 units will cost Rs.7 per unit.

The Delhi government said it will give a subsidy of Rs.1.20 to those in the first slab. In the process, they will be charged at the existing rate of Rs.2.70 per unit of power.The government pledged to subsidize those in the second slab 80 paise per unit, effectively bringing down the cost to Rs.5 per unit.

"The two categories were given this subsidy to take care of the poorest section and to give relief to the middle class besides encouraging consumers to conserve energy," said an official statement.But there will be no subsidy for households consuming over 400 units.

After the fresh subsidy, which will cost the government Rs 550 crore, there will be no change in tariff for those who consume up to 200 units while those in the next slab of 201-400 units will, in fact, pay 50 paisa less per unit from August. So, the new tariff order will actually affect only those who consume 401-800 units (a new slab) and more than that. These two categories will not get any subsidy in the other slabs too. In all categories, the fixed charges have remained unchanged. Also, there is no change in the 8 per cent surcharge to enable the discoms to recover past losses.

"The first two categories were given this subsidy to take care of the poorest section - in the initial slab - and also to give relief to the middle class besides encouraging consumers to conserve energy," said the chief minister. She said a per unit subsidy of Rs 1.20 will be given for consumption up to 200 units while a subsidy of Rs 0.80 will be given for 201-400 units. This neutralizes the hike in the first slab and reduces the existing tariff of Rs 5.50 per unit by 50 paisa.

The sop came soon after the new tariff order which anyway announced a minimal increase of 0.5 % in BSES areas, 2% in Tata Power Delhi Distribution Limited (TPDDL) areas and 4% in NDMC areas.

In the tariff order, the total hike announced for the financial year 2013-14 is 5%, but DERC has merged the fuel surcharge component with the energy charges which effectively reduces the net hike. For instance, in BSES areas, the existing fuel surcharge is 4.5% which in the existing bill is a separate component applicable on the energy charges that the consumer pays per unit of consumption. In the new bill, the two have been merged and hence the net increase comes out to be 0.5% only.

The same formula will be applicable in TPDDL and NDMC areas where the fuel surcharge is 3% and 1%, and hence the hike is 2% and 4%, respectively.

However, because of the new formula, every time the fuel surcharge is revised, it will change the energy charges per unit consumption.

Interestingly, DERC has asked the discoms to give a rebate to consumers who have a single phase connection of up to 10KW, depending on their billing cycle.

In May 2013, the DERC hiked electricity rates by 1.5 percent to adjust the power purchase cost of distribution companies. The commission earlier hiked the power rates by 22 percent in 2011.

Friday's power hikes drew immediate condemnation from the Bharatiya Janata Party (BJP) and Aam Admi Party (AAP) of Arvind Kejriwal.

The BJP has pledged to bring down power tariff by 30 percent if it wins power in Delhi. The AAP has been spearheading a focussed campaign against power rates in Delhi.

Source- Business standard


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