New Delhi: Approaching general elections along with recent assembly polls have taken a toll on the finances of state power distribution companies as many states are offering freebies to voters instead of filing tariff revision petitions with regulators to recover costs.
In many cases, regulators have allowed deferred tariff hikes, which cumulatively add up to Rs 1.35 lakh crore. Delayed tariff hikes cause loss of income and force the discoms to borrow heavily, although they are reflected in the balance sheet as ‘regulatory asset’.
Regulatory assets are estimated to have increased by almost Rs 60,000 crore between FY14 and FY18, raising questions on independent operations of electricity regulatory commissions and power distribution firms.
