The Power Ministry has extended the date of submission of comments on the proposed amendments to Electricity Act, 2003, which aims to rationalise electricity tariffs by doing away with differential tariffs for different types of users.
The draft amendment to Para 8.3A of the National Tariff Policy, in which the Ministry has proposed that tariff design and cross subsidy will no longer be based on differential tariffs for different types of use but be solely based on sanctioned load and consumption, was circulated last month. The deadline for submission was set at September 20. The date has now been extended till November, 5, according to the Ministry’s letter addressed to the key industry stakeholders.
The proposal, apart from going away with currently used categories of electricity consumers such as residential, industrial, commercial, agricultural for identifying the tariffs, proposes to penalise consumers for exceeding the sanction load.
At the same time, it offers rebates to incentivise bulk customers to take supply at higher voltage category. In what could be a boost to e-mobility sector, the Ministry has also proposed creating a separate tariff category for EV charging stations.
‘Welcome move’
According to Pune-based Prayas (Energy Group), the Ministry’s proposal is a welcome step towards tariff rationalisation as well as reduction of cross subsidy.“The proposed change can increase the scope for intra-category cross subsidy and could potentially increase equity in tariff design. It could also reduce tariffs for several small commercial and small industrial consumers,” experts said.
The experts note that the average cost of supply for most distribution companies (Discoms) has been growing at 6 per cent per annum on an average. At the same time, Discoms have been loosing revenues from large industrial and commercial consumers that are migrating to cheaper energy sources such as captive solar plants and open access. This migration is largely driven by rising costs of electricity that these customers get from Discoms and the current tariff design which is hinged on significant cross subsidy.