Lok Sabha Question No. 893 (UNSTARRED), answered on 2021-12-02
Subject: Price Hike of Electricity
Ministry: POWER
Asked by: N.K. Premachandran

## GOVERNMENT OF INDIA MINISTRY OF POWER LOK SABHA

## UNSTARRED QUESTION NO. 893 ANSWERED ON 02.12.2021

## PRICE HIKE OF ELECTRICITY

893. SHRI N.K. PREMACHANDRAN:

Will the Minister of POWER be pleased to state:

- (a) whether  the  Government  proposes to prevent  the  price  hike  of  electricity considering the difficulties faced by the people  during the Covid-19 pandemic  and if  so, the  details  thereof;
- (b) whether  the  Government  proposes  to  restrict  the  expense  of  the  institutions controlling  the  generation and distribution of electricity so as to control the price hike  of power and if so, the details thereof;
- (c) whether the Government proposes to fix a nation- wide reasonable tariff for electricity and if so, the details there of;
- (d) whether the Government proposes to control the price hike of electricity on account of hike  in  administrative  expense  of  electricity  boards  and  companies  in  control  of generation and distribution of electricity and if so, the details thereof; and

(e) whether the Government proposes to seek report from Kerala State Electricity Board about the reason for price hike of electricity and if so, the details thereof?

## A N S W E R

THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI  R.K. SINGH)

(a) :   A series of steps taken by the Government of India has helped to arrest the price hike of electricity in recent past. Such steps, inter-alia are:

- i. The Government of India decided to make an infusion of liquidity of Rs. 1,35,000 crore  through  Power  Finance  Corporation  (PFC)  Ltd.  and  Rural  Electrification Corporation (REC)  Ltd.  as  a  part  of  the  Aatmanirbhar  Bharat  Abhiyan.  Under  this intervention,  REC  and  PFC  extended  special  long  term  transition  loans  up  to  10 years to Discoms. As on 07.10.2021, PFC & REC have sanctioned Rs 1,35,537 crore and disbursed Rs 1,01,324 crore to various Power Discoms. This has reduced the

burden of Late Payment Surcharge of Discoms.

- ii. CERC, in accordance with the directions issued by the Government of India under section 107 of the Act, had issued an order to the effect that if any delayed payment by the DISCOMs to the generating companies and inter-state transmission licensees  beyond  45  days  from  the  date  of  the  presentation  of  the  bills  falls between  24.03.2020  and  30.06.2020,  the  concerned  distribution  companies  shall make the payment with LPS at the reduced rate of 12% per annum.
- iii. Further, in order to alleviate the financial stress on the DISCOMs, Government has advised the Generating companies and Transmission companies to  charge  Late  Payment Surcharge at a rate not  exceeding 1% per month for all payments  made  under  the  Liquidity  Infusion  Scheme  of  PFC  and  REC  under Aatmanirbhar Bharat Abhiyan.
- iv. The Electricity (Late Payment  Surcharge) Rules, 2021 notified on 22.02.2021 has reduced  the  rate  of    Late    Payment    Surcharge.  This  will  reduce  the  financial burden of Discoms.
- v. Discoms have also been permitted to exit from the Power Purchase Agreement of Central Generating Stations which have completed 25 years. This will reduce the power purchase cost of the Discoms.
5. (b) to (d):      As per the Electricity Act, 2003 the tariff determination is the domain of the Appropriate  Commission  which  carries  out  prudence  checks  on  the  expenditure  of regulated generating companies, transmission licensees and distribution licensees while approving  the  expenses.  In  the  tariff  regulation  of  the  Appropriate  Commission  the administrative expenses are considered as part of OM costs- which are fixed keeping in view prudence norms.
6. (e):     As reported by Kerala State Electricity Board Limited (KSEBL), they have not filed any tariff revision proposal before the State Commission as on date.

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