“Telangana Freezes Power Tariffs as Govt Covers ₹11,499 Crore Deficit”

Electricity Tariff Remains Unchanged as Telangana Government Covers Tariff Deficit

Hyderabad, October 28: In a significant move, the Telangana State Electricity Regulatory Commission (TGERC) announced that there will be no increase in electricity tariffs for the fiscal year 2024-25. The state government has committed to bearing the tariff deficit with a subsidy of ₹11,499.52 crore, which is ₹2,374.7 crore higher than the previous year’s subsidy. This decision aims to minimize the financial burden on low-income groups, with the government emphasizing its commitment to protect vulnerable populations from rising energy costs.

Details of Fixed Charge Adjustments

The TGERC approved only minor increases in fixed charges for certain high-consumption groups and high-voltage industries. Households consuming more than 800 units of electricity will see an increase in fixed charges from ₹10 to ₹50, while high-voltage industrial users will experience a ₹25 increase in fixed charges. This adjustment, effective from November 1, 2024, through March 31, 2025, is expected to generate an additional ₹30 crore for electricity distribution companies (DISCOMs) over the five-month period.

The TGERC rejected several other proposals from DISCOMs to raise fixed charges, particularly for low-consumption categories and agricultural users. For instance, the proposal to raise fixed charges for fish, shrimp farms, and sugarcane factories was declined, as was the increase requested for mushroom, goat, sheep, and poultry farms. However, minor increases were allowed for select categories such as industrial users and hoardings.

Subsidy Breakdown and Financial Support

The state government’s subsidy of ₹11,499.52 crore will cover the tariff deficit for both Southern DISCOM and Northern DISCOM. The government will contribute ₹1,699.45 crore for households using less than 200 units and ₹9,800.07 crore for agricultural subsidies under the LT-4 category. The approval of this subsidy, a 28% increase from the previous year, helped avoid tariff hikes across all consumer categories.

Increased Collection of Outstanding Dues from Government Departments

With outstanding dues of ₹25,000 crore owed to DISCOMs by various government departments, the TGERC advised that DISCOMs make active efforts to recover these amounts. These funds include unpaid electricity bills from government institutions, which have accumulated over several years.

Regulatory Updates and Financial Impact

The TGERC has introduced stricter deadlines for DISCOMs to submit Annual Revenue Requirement (ARR) proposals, setting a deadline of November 30. Failure to meet this timeline will result in daily fines. Additionally, the TGERC reduced the allowed rate of return on equity (ROE) by 0.5% per month, saving consumers ₹582 crore.