Ann: Investor Presentation Q1 2023, page-10

Andhra Pradesh-based producers forced to cut output

The approval of the increased electricity tariffs in India’s Andhra Pradesh affected the moods of local ferroalloy producers. Given weak Mn alloy demand and lower global prices, higher production costs force manufacturers either to cut or stop production.



ERC nod to increase power tariff in Andhra Pradesh, consumers to take additional burden of Rs. 1,400 crore


AMARAVATI: In what could be shocker to the power consumers, the Andhra Pradesh Energy Regulation Commission (APERC) has given green signal for increase of power tariff in the state. The new tariff will come into force from April, 1, 2022. The new tariff will impose a burden of Rs.1400 crore on the power consumers in the state. Recently, Telangana State ERC has allowed its discoms to impose an additional burden of Rs.5596 crore. AP state government is taking the burden of agriculture subsidy to the tune of nearly Rs.9513 crore while the same is around Rs.6754 crore in Telangana.
The APERC has granted its not to increase the tariff on all categories including the Below the Poverty Line (BPL) consumers. The power tariff for the new category of BPL consumers-1-30 units has been upped to 1.90 per unit from the previous Rs.1.45 per unit. This means that there is net increase of 0.45 paise per unit.
The tariff for the next bracket 31-75 units has been upped to Rs.3 per unit from the existing Rs.2.09 per unit. This results in a burden of Rs.0.91 paise per each unit. Similarly, the consumers of 76-125 units would have to bear power charges of Rs.4.50 per unit. Previous tariff for this segment is just Rs.3.10 per unit. The consumers from this category are made to take an additional burden of Rs.1.40 per unit.
The people consuming power between 126-225 units per month had to take an additional cost of Rs.1.57 per unit as the tariff was increased to Rs.6 per unit from the existing Rs.4.43 per unit. This segment has been made to cough up the most among the all. The tariff for the 226-400 bracket was increased to Rs.8.75 per unit from the existing Rs.7.59 per unit. There is an increase of Rs.1.16 per unit. All the consumers of above 400 units will have to pay Rs.9.75 per unit while the existing tariff is Rs.9.20 per unit.

“Even after the rationalisation of tariffs, the prices are relatively at a reasonable level compared to many neighbouring states. The tariffs for the consumption up to 75 units are still much below 50% of the average cost of supply and the consumer number falling under this range is about 50 percent of total domestic consumers,” said APERC chairman Justice CV Nagarjuna Reddy while releasing the new tariff order in Tirupati on Wednesday. He said that the deficit of these consumers is mostly met from cross subsidising consumers and they were continuously requesting the Commission to reduce cross subsidy from them. “With the increase in the tariffs to the domestic consumers the discoms will get additional revenue of about Rs.1400 crores only. At the same time, the State government has committed to extend a subsidy of Rs.11, 123 crores to the subsidised consumers,” explained Justice Reddy.
In fact, three distribution licensees APSPDCL, APEPDCL and APCPDCL projected an Aggregate Revenue Requirement of Rs.45398.66 crores with a combined deficit of Rs.10932.99 crores at current tariffs. The discoms have actually wanted to recover entire deficit of Rs.10932 crore by showing a net gap 'zero' in their filings. “Many stakeholders have expressed apprehension about the full cost tariffs proposed by the discoms. The Commission, after due diligence, has determined the ARR for the three DISCOMS at Rs.45972.70 crores with a net deficit of Rs.11123.21 crores after taking into consideration the additional revenue due to tariff rationalisation approved for the domestic class of consumers,” said ERC Chairman.