KCR mulls power tariff cut after reduction in coal rate

Hyderabad: Chief minister K Chandrasekhar Rao is seriously considering a proposal to reduce power tariff for some categories of consumers to pass on the benefits of reduced coal prices and efficiency improvement in the last three years. He is learnt to be waiting for a detailed report from the energy department before committing to it. If the plan goes ahead, Telangana will be the first state in the country to reduce power rates.

KCR wanted to know the exact cost burden to be borne by the power utilities if he announces a reduction in power tariff. Post GST, prices of coal have been reduced by over 5%, giving about Rs 150 crore relief to power generation stations. Telangana is heavily dependent on coal-based power plants, with Kothagudem, Ramagundam and Singareni units working round the clock to meet the ever-increasing power demand.

“Coal prices have come down due to tax reduction in the GST regime. It has resulted in savings of about Rs 150 crore. Similarly, the average power price has reported a fall in recent times. From Rs 4 per unit, the price has now come down to less than Rs 3 per unit,” said a senior government official.

These favourable conditions have encouraged the chief minister to mull a price cut for poor consumers. As per Telangana State Electricity Regulatory Commission (TSERC) statistics, there are about 60 lakh consumers whose monthly consumption is less than 100 units. They currently pay Rs 1.45 per unit for the first 50 units and Rs 2.60 per unit for 51-100 units.

 During the tariff revision in 2016, this category of consumers was exempted from rate hike as KCR agreed to bear the subsidy amount in the budget. The tariff for consumers who used over 100 units a month was revised by 8%. The tariff hike proposals for the current year were rejected by the CM, who asked the power utilities to mop up funds through improvement in efficiency.
Accordingly, Transco and Genco reported excellent performance with regard to reduction in line losses, commercial losses and generation cost. The performance improvement is expected to net Rs 500 crore, which the chief minister wants to pass on to the consumers.

“The chief minister is mulling to effect a price cut for poor consumers and is seriously examining the possible burden on the exchequer. A decision to this regard will be made soon,” said top sources in the government.

 

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