• Power tariff hike: FSA of Rs 1.40 per unit likely to be imposed in Haryana

    Although, Haryana Discoms have proposed no direct tariff hike this year but consumers will have to pay additional fuel supply adjustment (FSA) charges of about Rs. 1.40 per unit on account of previous years pending dues and recent judgment of APTEL.

    Haryana Discoms have revised their annual revenue requirement (ARR) petitions after taking into account the implementation of UDAY scheme, which leads to changes in the projections of interest and finance charges for the Discoms, which had an impact on the revenue requirement of the Discoms.

    First tranche of UDAY bonds against 50 per cent of the debt of Discoms as on September 3, 2015 amounting to Rs 17,300 crore has been issued and the second tranche will be taken over by September end, towards 25 per cent of the debt amounting to Rs 8,650 crore.
    As per ARR, the total revised cash gap for Haryana Discoms for the year 2016-17 comes out to be Rs 4,106.87 crore. The Discoms have proposed no tariff increase and have submitted that cash gap is proposed to be funded through the operational funding requirements (OFR) allowed under UDAY scheme. However the cumulative gap is estimated at Rs 7,695 crore.
    APTEL, in its judgment dated 7th April has allowed certain generators like Adani Power, GMR Kamalganga, Sasan Power Ltd and CGPL recoveries on account of force majeure / change in law / date of commercial operation date (COD) etc.
    The above is expected to have an implication of Rs 1,240.90 crore on account of recovery of arrears pertaining to previous years and needs to be recovered therefore; the total net unrecovered is Rs 1,958.26 (1240.90+717.219) crore. The Discoms propose to recover this amount by the end of financial year at the rate of Rs 1.06 to Rs 1.27 per unit and government would give a relief of 25 paise per unit on this to the consumers.
    In addition to the above, it is proposed that the fuel supply arrears (FSA) of last two years and the current monthly impact of APTEL’s judgment will be met through the concurrent FSA @40 paise.
    The net revenue requirement has been projected as Rs 31,156 crore. The major component of this is power purchase. The total power purchase cost has been increased from 21,787 crore to 24,908 crore. The operation and maintenance expenses include employee’s salaries, terminal liability and administrative expenses. Even the loan liabilities of 50 per cent taken over by the state interest component are 2,893 crore.
    The total revenue receipt has been assessed as Rs 18,637 crore from sale of power at current rates, leaving a gap of Rs 12,518 crore. The government subsidy for cheap power will be Rs 6,800 crore. The net gap remains Rs 5,718 crore. The fuel supply adjustment charges at current rates will be Rs 3,205 crore. The provision of liability under APTEL judgment has been taken as Rs 1,291 crore, thus creating a net gap of Rs 4,106 crore which the Discoms have proposed to be funded through OFR.
    The proposed loss reduction from 33 per cent plus to 25 per cent plus will be a major challenge before the Discoms, as net power available for sale has been worked out on this assumption.
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