The central government is going to make an important variation in the power sector. The draft of the new electricity bill has been finalised. It will be introduced in the Winter Session of Parliament starting November 29. This will directly affect crores of electricity customers of the country. The first major change is that the central government will no longer give subsidies to power companies. However, the government will directly transfer it to the accounts of the customers, as an LPG subsidy.
On the other hand, the power companies will charge the complete bill from the customers. This means that the customers will get the electricity at a higher price than they use to get before. Due to this, the government will not be able to provide free electricity. However, the days of free electricity will end soon.
It may also happen the Central government will continue to subsidize only the needy, like happening in the case of LPG. Whereas, at present, all electricity customers get the benefit of subsidy according to the law across the country.
Rajasthan has one of the highest electricity rates in the country. It contributes nearly 80% to the total cost of supply of the Discoms. Rajasthan's power purchase cost is Rs 4.81 per kWh, which is about Rs 0.08 per kWh higher than the national average of Rs 4.73 per kWh. Whereas on the other hand for other states' excluding UP, it is half in comparison to Rajasthan.
With the new law, electricity companies will be allowed to charge bills from consumers based on input cost. At present, the cost of power generation companies is Rs 0.47 per unit more than the bill charged from the customers. Therefore, Companies compensate for this through subsidies.
So far it is a system that the state governments give advance subsidies to the distributor power companies. Electricity rates are decided based on this subsidy.
