Discoms to wait further for fixing power tariff

Hyderabad: Submission of Annual Revenue Requirement (ARR) report by the Distribution Companies (Discoms) may be delayed as the government is yet to appoint chairman and members of the Telangana Electricity Regulatory Commission.

In a recent interaction, chairman and managing director of Transco D Prabhakar Rao said that ARR report may be submitted in November. However, the government has to appoint chairman of ERC to oversee the submission process.

He said that the appointment of chairman and members of the ERC was the prerogative of the government and the secretary of the Energy department has to take decision.

he ARR report could be submitted only after the appointment of the new chairman and members of ERC as per the Electricity Act. So unless the ERC is reconstituted the ARR report could not be submitted.

The term of the former chairman of the ERC ended eight months ago and the post is yet to be filled. The government has appointed a search committee to find a suitable person for the post and it is yet to give its recommendations.

The Discoms have to submit Annual Revenue Requirement Report to the ERC to get the permission to raise the tariff or even to reduce them.

The Discoms on the basis of their operations in a year would prepare the report and submit it to the ERC.

Each year, the ARR report would be submitted to the ERC in June or July and permission is taken to adjust the power tariffs. The ERC publishes the report and seeks objections from the stake holders.

The experts of the power sector, representatives of industries, commercial establishments, railways and others would present their views on the proposals being made by the Discoms on tariff. The ERC takes final decision on the tariff and fixes them for a year.

However, the process was put off last year as the Discoms on the advice of the government did not file the ARR report. The tariff of 2017-18 continued for 2018-19 period.

On the other hand, the Discoms are reeling under pressure due to the changes made in the purchase of power from the open market and rising costs. The Centre has imposed restrictions on buying the power on daily basis. It has strictly instructed that the Discoms should submit the bank guarantee every month to buy the power from the market.

This has restricted the freedom of the Discoms to buy power on delayed payment. They have also been facing financial problems as the expenditure is rising.

They have to keep enough money in the banks to purchase the power and this requires good inflows of revenues. According to the experts, the Discoms have to raise the tariffs to meet the financial demands and unless the ARR report is submitted, it would not be possible to ensure rise in the revenue.