State govt to absorb Rs. 4,498 cr power True-Up, no tariff hike

Vijayawada: In a major New Year relief to electricity consumers, the state government has decided to bear the entire true-up burden of Rs 4,497.89 crore, ensuring that there will be no additional financial burden on power users across the state. The decision pertains to the Fourth Control Period (2019-20 to 2023-24) and follows a formal undertaking given by the government to the Andhra Pradesh Electricity Regulatory Commission (APERC).

APERC issued the final orders late on Wednesday night, marking significant relief for domestic, agricultural, and commercial electricity consumers. The Commission noted that the government’s intervention would prevent the passing on of accumulated power sector costs to the public.

Chief Minister N Chandrababu Naidu, who had earlier assured that electricity charges would not be increased after the coalition government came to power, has fulfilled that commitment by absorbing the multi-thousand-crore liability. Officials said the move reflects the government’s resolve to ease financial pressure on households, while at the same time ensuring the financial stability of the power sector.

According to APERC, the three power distribution companies — Andhra Pradesh Southern Power Distribution Company (APSPDCL), AP Central Power Distribution Company (APCPDCL), and Andhra Pradesh Eastern Power Distribution Company (APEPDCL) — had initially sought permission to recover a total of Rs 14,207.52 crore from consumers. This included Rs 10,057.82 crore as true-up amount and Rs 4,149.70 crore towards carrying cost. After adjusting Rs 1,435.55 crore already accounted for in earlier orders, the discoms requested approval to collect Rs.12,771.96 crore from electricity users.

However, after a detailed scrutiny of the claims, APERC rejected proposals amounting to Rs 8,274.07 crore, including the entire Rs 4,149.70 crore carrying cost, besides inadmissible expenses related to transmission charges and other adjustments.

The Commission disallowed several components such as bill discounting costs, bad debts, short-term operational loans, excess transmission expenses, non-tariff income corrections and late payment surcharge calculations.

Following the examination, APERC approved a gross true-up of Rs.5,933.44 crore. After deducting the previously adjusted amount of Rs 1,435.55 crore, the net true-up approved stood at Rs 4,497.89 crore. As per the approved allocation, APSPDCL will receive Rs 1,551.69 crore, APCPDCL Rs.1,163.05 crore and APEPDCL Rs 1,783.15 crore. Importantly, APERC recorded that the Government of Andhra Pradesh, through a letter dated December 31, undertook to bear the approved true-up burden in full, in order to avoid hardship to consumers and honour its commitment not to increase electricity charges.

Accordingly, the commission directed the discoms to claim the approved amounts from the state government, instead of passing the costs on to end consumers. APERC stated that the order represents a balanced and consumer-friendly approach, protecting public interest while maintaining the financial viability of power utilities.