Electricity Tariff Hike

The Gujarat Government has followed the footsteps of  the Rajasthan and Delhi State Governments by increasing electricity tariff.

Rajasthan had increased electricty tariff by 20% in April 2011 followed by an increase of 22% by the Delhi State Government.

GERC- Gujarat Electricity Regulatory Commission has been more moderate with an increase of ~4% in electricity tariff.

Meanwhile, it looks we will see another hike in diesel prices soon enough. Per unit (kWh) price of electricity from diesel is anywhere between Rs.13-Rs.16, depending on location and various other factors. With this hike, accompanied with rise in petrol prices the industry will see a bigger rise in price of electricity generation using diesel.

From the REC perspective, it will be interesting to see what effect these tariff will have on  the APPC. 

On the other hand, Solar industry has been comparing  solar costs with diesel and now with diesel price hike, the market may see more push on solar off-grid.

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One Response to Electricity Tariff Hike

  1. sarita says:

    The rush to raise tariff rates is not unsusual – most analysts and industry observers have been expecting it for a while now. UBS points out that at least 16 out of 28 states have either proposed or implemented power tariff hikes over the past six months. These states account for 80 percent of power consumers.

    The reason for the hikes is simple: most SEBs are struggling with increasing costs, and many of them are loss-making. According to the finance ministry, if tariffs are not hiked, SEBs are expected to suffer annual losses of Rs 1,16,089 crore by March 2015.



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