Distribution utilities (Discoms) that owe power generating companies over Rs. 40,000 crore, according to recent industry estimates, have been slow in filing for power tariff revision before State electricity commissions, even though the tariff hike could help them address revenue gaps.
Though Discoms have made some progress in reducing losses and improving debt levels under the government’s Ujwal DISCOM Assurance Yojana (UDAY) scheme, the tariff hikes proposed by the Discoms and approved by the SERCs for the past two-three years have remained lower than what was agreed under the UDAY MoUs, said the credit rating agency ICRA, in a note.
While the delay in filing tariff petitions is a deviation from the terms of the UDAY scheme, it also creates a persistent gap between average tariff and average cost of supply, ICRA pointed out.
