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Tariff hike should be last resort: Scindia

Last Updated: Thursday, May 9, 2013 - 13:26

New Delhi: Hike in electricity charges should be the last resort and states should instead focus on keeping a tab on transmission-related losses, including power theft, Power Minister Jyotiraditya Scindia has said.

"As Minister of Power, Government of India, I think that hike in tariff should be the last alternative. There are a couple of other options that are available," Scindia told a news agency in an interview.

Blaming high levels of Aggregate Technical & Commercial (AT&C) losses as a key reason for rise in tariffs, Scindia said there was a need for greater transparency and accountability on the part of distribution companies as well as the state governments to tackle the problem.

AT&C losses, that includes losses incurred during electricity transmission and theft, are estimated at about 26.4 percent on a national average.

Scindia said AT&C losses have come down significantly in the last 4-5 years from the levels of 32-33 percent, but it still remains very high and need to be brought down to about 15 percent on a state level.

"The hike in tariff is largely happening because AT&C loss is very high. If states lower their AT&C losses, they will improve transparency, accountability, then the tariff revision to that extent will be much lower," he said.

The Minister, however, refused to intervene in the process of determining power tariffs, saying states were empowered to decide on tariff fixation.

"However, even states cannot hike tariff on their own and they need to petition the State Electricity Regulatory Commission (SERC), which has got the authority to decide.

"The states generally present their `Average Cost of Supply` and `Average Revenue Realisation` before the Commission and seek a tariff hike to bridge the gap between the two. But the decision is taken by the SERC," Scindia said.

"The reason why this authority (SERC), which have quasi judicial powers, has been established is to avoid any political or government interference in the process," he said.

"If you want me to interfere in what the SERCs and CERC does, then better disband them. We are trying to create autonomy and independence in the system so that there is rigour, transparency and accountability. Which is why the states have to petition the SERCs," Scindia said.

Last year, many states including Tamil Nadu and Rajasthan had raised power tariffs, while there are such proposals in other parts of the country as well for higher electricity charges.


First Published: Thursday, May 9, 2013 - 13:25
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