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Assam can follow other States

By Ajit Patowary
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GUWAHATI, July 29 � While the State Government is failing to provide financial assistance to the State�s power sector in an assured manner, governments of several other States, like Andhra Pradesh, Punjab, Tamil Nadu, etc, in the country have been providing such assistance to their power companies. The name of the Tamil Nadu government comes first in this respect, said power engineers here.

The Tamil Nadu Electricity Regulatory Commission in its March 17, 2010 order on the provision of tariff subsidy by the Tamil Nadu government for the year 2010-11 said that the latter had issued policy directions under Sub-section (1) of Section 108 of the Electricity Act, 2003, for extension of free supply, or, concessional tariff to different categories of consumers.

The Tamil Nadu Electricity Board (TNEB) had sought subsidy of Rs 1334.75 crore for the domestic consumers, Rs 218.78 crore for the agricultural consumers under normal category, Rs 57.91 crore for the agricultural consumers under SFS category, Rs 17.92 crore for the hut consumers, Rs 6.31 crore for the actual place of public worship, and reduction of Rs 34.58 crore in tariff for the power loom consumers, Rs 30.90 crore for free supply of power to the power loom consumers, Rs 6.83 crore for free supply of power to the handloom weavers, reduction of tariff to the tune of Rs 35.79 crore for streetlights, public water supply, etc , for 2010-11. The total amount thus sought to be subsidized amounted to Rs 1743.77 crore.

The Tamil Nadu Electricity Regulatory Commission approved a subsidy amount of Rs 1652.43 crore for the TNEB for the year 2010-11.

Earlier also, the TNERC approved subsidies to the TNEB for the years of 2007-08, 2008-09 and 2009-10.

Power engineers also refer to the article written by Anjan Ghosh, Head, Corporate Ratings, Sabyasachi Majumdar and Girish Kumar Kadam, which has said, � It has been stated that the rising subsidy continues to remain an area of concern; subsidy payment by State governments remains inadequate and irregular in some States.� (ICRA Rating Feature, State-owned Electricity Distribution Companies: Key Indicators & Credit Perspective)

Authors of this article argue that the subsidy- dependence for the distribution companies (discoms) depends upon a mix of factors. These include � State government policy on supply of free electricity to agriculture consumer category; the extent of tariff compensation to subsidised consumer categories; growth in and mix of agriculture consumption in overall sales; dependence of utility on short-term/costlier sources of power; the extent of power deficit in the State and inability to pass on cost increases through tariff hikes in a timely manner.

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Assam can follow other States

GUWAHATI, July 29 � While the State Government is failing to provide financial assistance to the State�s power sector in an assured manner, governments of several other States, like Andhra Pradesh, Punjab, Tamil Nadu, etc, in the country have been providing such assistance to their power companies. The name of the Tamil Nadu government comes first in this respect, said power engineers here.

The Tamil Nadu Electricity Regulatory Commission in its March 17, 2010 order on the provision of tariff subsidy by the Tamil Nadu government for the year 2010-11 said that the latter had issued policy directions under Sub-section (1) of Section 108 of the Electricity Act, 2003, for extension of free supply, or, concessional tariff to different categories of consumers.

The Tamil Nadu Electricity Board (TNEB) had sought subsidy of Rs 1334.75 crore for the domestic consumers, Rs 218.78 crore for the agricultural consumers under normal category, Rs 57.91 crore for the agricultural consumers under SFS category, Rs 17.92 crore for the hut consumers, Rs 6.31 crore for the actual place of public worship, and reduction of Rs 34.58 crore in tariff for the power loom consumers, Rs 30.90 crore for free supply of power to the power loom consumers, Rs 6.83 crore for free supply of power to the handloom weavers, reduction of tariff to the tune of Rs 35.79 crore for streetlights, public water supply, etc , for 2010-11. The total amount thus sought to be subsidized amounted to Rs 1743.77 crore.

The Tamil Nadu Electricity Regulatory Commission approved a subsidy amount of Rs 1652.43 crore for the TNEB for the year 2010-11.

Earlier also, the TNERC approved subsidies to the TNEB for the years of 2007-08, 2008-09 and 2009-10.

Power engineers also refer to the article written by Anjan Ghosh, Head, Corporate Ratings, Sabyasachi Majumdar and Girish Kumar Kadam, which has said, � It has been stated that the rising subsidy continues to remain an area of concern; subsidy payment by State governments remains inadequate and irregular in some States.� (ICRA Rating Feature, State-owned Electricity Distribution Companies: Key Indicators & Credit Perspective)

Authors of this article argue that the subsidy- dependence for the distribution companies (discoms) depends upon a mix of factors. These include � State government policy on supply of free electricity to agriculture consumer category; the extent of tariff compensation to subsidised consumer categories; growth in and mix of agriculture consumption in overall sales; dependence of utility on short-term/costlier sources of power; the extent of power deficit in the State and inability to pass on cost increases through tariff hikes in a timely manner.

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