With state-owned power distribution companies proposing a rise in levies imposed on openmarket consumers in their tariff petitions for the coming year, spot market power is all set to become costlier.
Discoms (Distribution Companies) have proposed increasing network usage charges, multifold cross subsidy surcharges as well as imposing additional surcharges that could increase the electricity bills of large consumers by as much as 40%.
According to the opinions of experts, increasing spot market purchases will hurt the growth of the industries which will in turn, render them uncompetitive and also hurt the ‘Make in India’ campaign by the Narendra Modi government.
State power discoms, Odisha recommended increasing network-wheeling charges on commercial customers in FY18 to Rs 2.26 per unit from Rs 0.63 per unit. For large industrial consumers, cross-subsidy charges are proposed to be increased to Rs 3.61 per unit from Rs 1.91 per unit.
When it comes to large consumers, tariff in the state purchasing electricity from spot market are expected to increase by more than forty percent.
Madhya Pradesh power utilities seek to introduce additional surcharge of Rs 1.2 per unit on power procured from other sources which will make purchases costlier by twenty four percent. Though, raising cross-subsidy charges have also been proposed by Delhi discoms but, they have also proposed decreasing additional charges on open market electricity deals which will ultimately lead to a net increase of 30-40 paise per unit.
Many other states like West Bengal, Rajasthan, Maharashtra and Punjab levy charges (open access charges) on their commercial and industrial consumers to stop them from buying spot markets and protect their power distribution companies.