Clean energy bid can help states with huge bills for subsiding power

A. Selvan, who works as a contract driver in Chennai, gets a bimonthly electricity bill of around Rs 800. If it were not for the Tamil Nadu government’s power subsidy for domestic consumers, he would have had to pay thrice that amount, around Rs 2,500.

Tamil Nadu, like many states in India, supplies free or subsidised power to certain categories of consumers, primarily domestic and agricultural users. Gujarat, Haryana, Himachal Pradesh, Karnataka, Punjab and Uttar Pradesh are the other states that offer variable subsidies to different categories of users.

While subsidised power is useful for Selvan and consumers like him, it inflicts massive losses on power distribution companies (discoms) and affects their ability to pay power producers. Most states have logged huge delays in payments to producers.