Haryana discoms to recover fuel surcharge | SupportBiz


Haryana discoms to recover fuel surcharge

Power distribution companies (Discoms) in Haryana will recover Fuel Surcharge Adjustment (FSA) from electricity consumers in the state to tide over mounting debt and losses, a senior officer said Sunday.

With the cost of power supply in Haryana having increased by 330 percent during last 10 years and a meagre tariff hike of 27 percent in the same period, the two power distribution agencies in the state have accumulated losses of over Rs.8,830 crore, Dakshin Haryana Bijli Vitran Nigam (DHBVN) and the Uttar Haryana Bijli Vitran Nigam (UHBVN) chairman and managing director Devender Singh said.

He said that the gap between cost of supply and rate of return of electricity has increased to Rs.2.50 per unit, leaving an accumulated loss of Rs.8,830 crore.

Owing to the rising debt and the expenses incurred by the state's two discoms DHBVN and UHBVN to purchase costly power for supply to consumers in recent months, the electricity bills of the consumers will include FSA, Singh said.

He said that the FSA is the additional fuel cost that was paid to generating companies but not collected from consumers by discoms in the previous months.

"The electricity bills of consumers from the relevant period did not cover the actual cost of fuel that distribution companies paid to generators to buy power. To make up for the loss that discoms suffered, it collects FSA.

"This is not tariff or a part of the tariff. It ceases to be charged after a specific period, when the recovery of the extra cost on purchase of power is recovered," Singh said.

According to Singh, the cost of purchase of power has increased by 335 percent on account of fuel price rise, coal shortage and other issues, causing increase in cost of power supply by 330 percent during last 10 years.

He pointed out that during the same period, there had been only two tariff hikes - 11 percent in October, 2011 and 16 percent in April this year.

"To meet their operating expenses, the discoms had to borrow so much that their current interest burden stands at Rs.1.50 per unit. The total debt amounts to about Rs.19,000 crore," Singh said in Chandigarh.

Steps were being taken to bring down transmission and distribution losses and other expenses of the discoms.

The FSA is one of the automatic cost recovery mechanisms approved by the Electricity Regulatory Commission, for utilities, to recover costs of power purchased from generators which is not recovered by the basic rate, Singh added.