CEA proposes sharp rise in fixed monthly power charges for consumers

NEW DELHI: Central Electricity Authority (CEA) has proposed a nationwide overhaul of electricity tariffs, recommending a sharp increase in fixed monthly charges paid by consumers as power distributors struggle to recover costs amid rising rooftop solar adoption and migration of industries to captive power.

The proposal could eventually mean consumers paying a larger portion of their bill as a compulsory monthly charge, regardless of actual power consumption.

In a report, which will be placed before the Forum of Regulators for implementation, CEA said discoms recover a large part of their fixed costs through per-unit electricity charges instead of assured monthly payments, making their finances vulnerable whenever demand falls.

While expenditure on transmission, salaries, maintenance of networks and paym-ents to power generators account for 38%-56% of a power utility’s cost, revenue from fixed charges contributes only 9%-20%, the report said.

CEA noted that industries and affluent households shifting to rooftop solar, open access and captive power projects, sharply reduce electricity purchases from discoms but continue relying on the grid for backup supply.

The authority has recommended a “calibrated and phased approach” for targeted recovery by progressively increasing fixed-cost recovery from domestic and agriculture consumers to 25% and from industrial, commercial and institutional categories to 100% by 2030. The fixed-cost recovery for the former could be increased.

The report also suggested separate tariff structures for rooftop solar and net-metering consumers.

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