(FE)
The government’s stated plan to provide electricity connections to 3.63 crore households by December this year, if implemented, will raise the power distribution companies’ (discoms) supply cost by an annual Rs 32,200 crore or roughly a quarter. Since the discoms aren’t recovering their full costs from household consumers, the additional supplies under the Saubhagya scheme could add some Rs 3,800 crore to their annual losses, if all the new ones to be electrified have a consumption pattern like that of the average electrified household. Without the subsidies provided by state governments, the extra losses could even be over Rs 7,100 crore.
The gap between cost of power supply and tariff for households is Rs 1.20/kwh (based on audited figures of FY16); in other words the cost is about 30 % higher than the tariff. Since an average subsidy of more than a tenth of the cost is provided by state governments (it is another matter disbursal of these sops is often delayed), the discoms’ cost recovery is around 88%. The 12% gap in recovery is mostly attributable to aggregate commercial and technical losses. FE has based its calculations on audited FY16 ACS-ARR gap of 65 paise/unit (the gap, thanks to steps taken to pare AT&C losses and the reduced cost of power procurement) has reportedly come down since to 29 paise currently.
