Madhya Pradesh: Expect electricity tariff hike sometime soon as power companies propose hike of 7%

Experts say 3-5% hike on the cards

Staff ReporterUpdated: Wednesday, November 04, 2020, 09:32 PM IST
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With by-elections over and most of the activities ‘unlocked’, the Madhya Pradesh Electricity Regulatory Authority is expected to announce the revision of electricity tariff sometime soon.

Though the power company has urged the regulatory authority to increase the tariff by 7%, experts feel that hike of about 3-5% could be recommended to provide relief to power companies.

The MP Electricity Regulatory Authority generally revises the rates in March-April but this year due to Covid-19, revision of tariff was postponed. Later, announcement of by-elections on 28 assembly constituencies further delayed the process.

Due to Covid pandemic this year, public hearing by MP Electricity Regulatory Authority was not held. Rather, the authority officials invited objections and suggestions on the proposals submitted by the power companies.

The MP Power Management Company had proposed a hike of average 6.84% in the tariff for all its three distribution companies. The proposal submitted by the power management company for the year 2020-21 has demanded revenue of Rs 41,332 crore whereas it has shown revenue generation of Rs 39,332 crore only. Thus it has demonstrated requirement of Rs 2000 crore to meet the company expenses.

The steepest hike has been demanded by the largest power distribution company of the region- the Western Region Power Distribution Company. It has demanded a hike in tariff rates by 7.06%. At present the company’s income stands at Rs 15,422 crore whereas it requires Rs 16,199 crore- a deficit of Rs 777 crore- expected to be met out through increasing electricity rates.

In its proposal for tariff hike, the MP Power Management Company has shown additional requirement of Rs 12,220 crore for Eastern Region Power Distribution Company for the year 2020-21. At present, it has earning of Rs 11,624 crore thereby having a deficit of Rs 596 crore. It has proposed a hike of 6.59% in tariff.

Central Region Power Distribution Company has shown a deficit of Rs 727 crore and has demanded a hike by 6.83%. The company’s present income is Rs 12,286 crore whereas it requires Rs 12,913 crore for the year 2020-21.

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