Power distribution companies News

Adequate and timely tariff hikes, and lower aggregate technical and commercial (AT&C) losses are required to sustain structural improvement of power distribution companies, rating agency Fitch says.  

The Union Cabinet, headed by Prime Minister Narendra Modi, approved a scheme to ease the financial crunch facing power distribution companies, or discoms, that has impaired their ability to buy electricity.

Hit by subsidised tariffs, state electricity discoms are facing cash crunch and are incurring annual losses of about Rs 60,000-70,000 crore.

Jaitley said India is generating more power than it needs. "First time in history, we have surplus resource. The generation companies are in difficulty because there are no takers of power."

Stressing the need to hike power prices gradually, Union Minister Piyush Goyal Wednesday said increasing electricity tariffs is not the only way out for the loss-making distribution companies.

Reserve Bank Governor Raghuram Rajan on Tuesday said the bank is working with the Centre and the state governments to revive distressed power distribution companies.

Making it clear that states will have to finance their loss-making electricity boards, Finance Minister Arun Jaitley on Monday said a plan has been worked out by the Power Ministry and it would now discuss the same with the respective state governments and their discoms.

Prime Minister Narendra Modi will meet power producers like NTPC and NHPC on Tuesday.

The combined debt of power distribution companies (discoms) stands at over Rs 3 lakh crore. Faced with acute financial stress, many of these are unable to buy power.

Power tariff in the city may go up next month as Delhi Electricity Regulatory Commission is all set to levy a fuel surcharge to help the private distribution companies adjust their power purchase cost.