Domestic electricity tariffs are likely to rise on a regular basis, similar to petrol and diesel prices, beginning in the financial year 2023. On Wednesday, the Telangana State Electricity Regulatory Commission (TSERC) issued draft orders granting the electricity distribution company (Discom) complete freedom to increase electricity bill tariffs without seeking permission from the state government.
The State Electricity Control Board issued ‘Second Amendment Orders 2022’ in response to the Central Power Department’s orders. It has been clarified that the previously issued electricity tariff revision guidelines have been revised for the second time.
Discom collects Fuel Cost Adjustment (FCA) in the form of bills once a year. As a result, the general public faces a greater financial burden. In addition, the central government recently ordered that electricity prices be revised monthly. Discoms buy electricity from the Indian Energy Exchange on a daily basis for about Rs 3 to Rs 12 per unit, and the load is collected through monthly bills.
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According to ERC President Sri Ranga Rao, amendment orders are required to implement the changes. It is critical to understand what FCA is. Many power plants buy electricity from the Indian Energy Exchange (IEX) on a daily basis in order to supply power to the general public. As a result, each unit of electricity is charged a fixed price.
This price is used to pay for the purchase of coal, petroleum, diesel, and other raw materials used in the thermal power station’s electricity production, as well as employee salaries. The power station calculates the average cost per unit based on this cost. If the cost rises here, FCA is allowed to charge the general public 30 paise per unit through electricity bills every month. However, if the price is more than 30 paisa per unit, the commission must be consulted first.
The state government had until November 30 to grant permission to revise the electricity tariff, and the proposal to increase the electricity rates had to be submitted to the ERC.
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