Major reforms of power tariffs are on the horizon as an official committee has recommended lower tariffs for heavy users to encourage electricity consumption as the country moves from a deficit to surplus situation. In India, power consumers have always been paying higher bills for higher consumption. Slabs are fixed and if you fall in the higher consumption range, you pay more. It's time the country doles out incentives for high power consumption, a committee constituted to advise the government on ways to increase electricity demand has said.
"The present tariff structure has been designed for power shortage scenario in states and has not been changed since Independence. Since India has excess electricity generation capacity now, the existing framework needs to be changed to address the capacity generation glut," said a member of the committee constituted by the power ministry in September last year to suggest innovative schemes for raising power demand.
The committee comprises of chairman of the Central Electricity Authority, secretary of the Central Electricity Regulatory Commission (CERC), president of industry body Ficci, energy secretaries of Bihar and Tamil Nadu and principal energy secretaries of Madhya Pradesh, Gujarat and Uttar Pradesh. The committee is in the process of finalising its report and is likely to present it to the power ministry by January-end.
The official said the committee is of the view that to boost electricity demand, rebates and incentives in electricity bills be extended to consumers.
The state electricity regulatory commissions should revise the tariff design for all consumers, particularly industry, commercial and service sectors, the official said.
Presently, consumers are penalised by way of higher tariffs for higher consumption.
The committee also opines in the draft report that more states can offer power at lower rates to industries during night and off-peak hours. Such system of differential tariff is in place in some states and Madhya Pradesh has seen increase in power consumption. The committee has also explored other short term and long term options for enhancing power consumption.
These include promoting manufacturing under Make in India through electricity assurance, encouraging use of electric vehicles and electric equipment in construction activities.
ET on December 25 reported that the government planned to introduce a new tariff structure to charge more from large domestic power consumers rather than industrial units that currently share the cross subsidy burden. Most states categorise households consuming more than 800 units of power a month as large domestic consumers.