Consumers in for a shock as Telangana Discoms plan to collect Rs 4,000 crore true-up charges

HYDERABAD: In a development that is likely to deliver yet another rude shock to electricity consumers, the two power distribution companies in the State have proposed to collect Rs 4,092.23 crore true-up charges, which are pending for the last 15 years. This is in addition to Rs 5,596 crore additional revenue to be collected by the Discoms, through the revised power tariff, which came into effect in April this year.

With this the total burden on the power consumers will be a whopping Rs 9,688 crore. The Discoms — TSSPDCL and TSNPDCL submitted the proposals for collecting “distribution true-up” charges and the State Electricity Regulatory Commission (ERC) has decided to conduct the public hearing on the matter on September 26.

True-up charges are the additional expenses incurred for purchase/generation of power and other expenses. According to sources, the Discoms are yet to submit the proposals for “retail true-up”, which will be around Rs 15,000 crore. The Discoms, for the first time, separated the distribution and retail true-ups.

The distribution true-up charges are the expenses incurred for augmenting the power lines, sub-stations and payment of salaries. The retail true-up charges are for the additional costs incurred on power purchases/increase in fuel charges like hike in coal prices.

However, experts opposed the move as the Discoms proposed to collect the pending true-up charges for almost 15 years from 2006-07 to 2020-21.“Collection of belated true-up charges are not permitted. It is a failure of the State government for the inordinate delay in collecting the charges. The proposal to collect the true-up charges should be dropped and the State government should bear the burden,” said M Venugopala Rao, Convener of Centre for Power Studies.

The proposals for true-up charges of previous year should be filed in the following year itself. But, the Discoms did not file the Aggregate Revenue Requirement (ARRs) for three years. The ERC allowed the Discoms to continue the old tariff for three years.

“In the absence of ARRs, how can Discoms propose true-up charges,” Venugopal wondered.  The Discoms are supposed to file true-up of retail supply business, giving details of the variation in power purchase cost of previous year along with the ARR for the following year. The Discoms have not filed true-up proposals in accordance with the ERC Regulations.