Telangana: Brace up for power hike

Hyderabad: Consumers may have to shell out more for power in the next financial year starting from April as the state government has slashed its fund allocation for power subsidy.

In the state budget presented to the Legislative Assembly on Monday, finance minister Etela Rajender allocated Rs 4,203 crore for power subsidy for 2017-18 as against Rs 4,500 crore in the current financial year.

Out of the Rs 4,203 crore, Rs 3,387 crore will allocated to Transco for agriculture and allied subsidy. The trimming of power subsidy allocation comes despite pleas from state power utility Transco seeking more funds to bridge the revenue gap.

According to Transco’s estimates, the gap between its revenue and expenditure in FY2017-18 would hover around Rs 10,000 crore. Sources said Transco officials had sought Rs 8,000 crore from the state government as a subsidy and proposed to raise Rs 2,000 crore of additional revenue through power tariff hike.

With the finance department ruling out Rs 8,000 crore subsidy, Transco had asked the government to increase the subsidy at least by Rs 2000 crore, taking the total to Rs 6,500 crore. However, as the finance minister presented the Budget, Tran-sco officials were in shock to realise that they have got less than what they had got last year.

The utility will now have to raise money by hiking power tariff. With only Rs 4,203 crore coming  in the form of the subsidy, Transco would have to raise Rs 5,800 crore either from consumers by increasing power tariff or by taking loans.

At present, the two Discoms in Telangana state have around Rs 3,000 crore debt. In the wake of Telangana joining the Centre’s UDAY scheme, the state government would have to absorb the 10 per cent of loss incurred by Discoms in FY2017-18 in its Budget for FY2018-19. This discourages the states to increase Discom loans.

After the completion of the ongoing Assembly session, Transco will submit tariff proposals to TS Electricity Regulatory Commission (ERC). Before that Transco officials will discuss with Chief Minister K. Chandrase-khar Rao and seek more funds to the department to meet the revenue gap. However the ERC will take a final decision hiking tariff.

With the forecast of a hot summer, Transco officials feel that power demand would increase gradually, which would further increase the need for additional funding. While earlier, Transco has estimated power dem-and in the next fiscal year to be around 9,500 MW, it has recently revised the estimates to 10,000 MW.