Report by Kamgar Ekta Committee (KEC) correspondent
The Central Electricity Authority (CEA) has proposed that electricity tariffs must be revised so that much more of the fixed cost of distribution companies (Discoms) is recovered from consumers than is being recovered today.
According to CEA, while the fixed part accounts for 38-56% of the Discoms’ costs, the fixed charges collected from consumers bring only 9-20% of the total revenue required to cover fixed costs.
The CEA has recommended a phased increase in fixed charges for retail tariffs over the next five years. It has proposed fixed-cost recovery targets of 25 per cent for domestic and agricultural consumers by 2030 and 100 per cent for industrial, commercial and institutional consumers.
Along with this proposal, the government has also proposed that the burden of cross subsidy should be eliminated from the tariff for industry in the next five years. This proposal will also lead to further rise in tariff for retail consumers.
The worst affected by these proposals will be crores of retail consumers who are already paying 14-15 Rs per unit in many places in the country.
Electricity is a basic necessity in today’s life and therefore access to it at affordable rate is a fundamental right of people. Increased tariffs will drive electricity beyond the reach of many in our country.
The various steps taken and proposed over the last few years are claimed to be to improve the financial condition of Discoms. Their real aim actually is to make Discoms financially attractive for privatisation. Profit driven Discoms is the demand of big power sector corporates who want to take them over.
Profit driven Discoms are not in the interest of either power sector workers or consumers. The power sector has been built with people’s money. Its operations are also funded out of people’s money. Electricity is a basic service for people of the country. Every organization of the power sector must be run accordingly.