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Ahmedabad: Power distribution companies in Gujarat have approached the state power regulator to increase tariff by as much as 12%, the steepest hike proposed in the state, as a shortage in fuel supplies have forced the distributors to buy expensive power.

While the state-owned power distribution companies have together sought about a 12% increase in tariffs, Torrent Power Ltd, the company that supplies power to Ahmedabad and Surat cities, wants to raise rates by about 8%.

If approved, there will be an approximate increase of 40-50 paise per unit (kilowatt hour) for all customers excluding farmers and the poor. Residential consumers in Gujarat currently pay 4.2-5.6 per unit of power.

The petition filed by the four state-owned power distributors and Torrent Power is scheduled to be heard by the Gujarat Electricity Regulatory Commission (GERC) later this month and the power regulator will take a final decision by March, according to a GERC official, who declined to be named.

GERC has allowed an increase of 1.6% in 2012-13 and 1.5% in 2010-11.

The total yearly sales revenue of power distributors will rise 10% to 25,822 crore if the new rates are implemented from 23,475 crore, according to the tariff petitions filed by the distribution companies.

Gujarat Urja Vikas Nigam Ltd, the state government-owned electricity services company, is the holding company for Uttar Gujarat Vij Co. Ltd, Dakshin Gujarat Vij Co. Ltd, Madhya Gujarat Vij Co. Ltd and Paschim Gujarat Vij Co. Ltd. Gujarat Urja Vikas buys 15,350 megawatts (MW) of power from various sources, including private companies, with whom it has entered into power purchase agreements.

Torrent has an installed capacity of 1,150MW (gas based) at Surat and 500MW at Ahmedabad, of which 400 MW is coal based and 100 MW is gas fired.

“The price revision is due to fuel supply problems, increase in operational cost. We are forced to buy costlier power," said an official of Torrent group who did not wish to be identified.

In January this year, Torrent Power said profit declined 55% to 95.66 crore in the quarter ended 31 December from a year earlier. The company attributed the decline to a fall in domestic gas supply as a result of which the company’s third quarter plant load factor at its Surat plant dropped to 35.95% from 70.41% in the year earlier.

“Reduced supply of power from Surat plant to the company’s regulated distribution areas at Ahmedabad and Surat necessitated purchase of short-term power at higher price, resulting into an additional impact to the tune of approximately 100 crore," the company said in a statement.

Of the 4,000MW power that Gujarat Urja Vikas buys from power plants in the state, the power generators are producing only about 1,000MW because of lower demand and costlier fuel, said a official of the state-owned company on conditions of anonymity.

“Many units are not functional for maintenance reasons. Plant availability factor is also a key factor. All the demand is first met by plants that are economical in generation. As a result, plants that run on costly fuel or where the generation cost is high lie idle," the official said.

Gujarat is one of the few states in the country where state electricity boards and power distributors are reporting profits because of lower transmission and distribution losses.

Transmission and distribution losses in Gujarat are about 15%, lower than the average distribution losses of about 35-40% in some other states. Torrent Power has the one of lowest such losses in the country at about 8% and 6% for Ahmedabad and Surat, respectively.

Consumer Education Research Society, a consumer body, has complained to GERC about power generating companies illegally transferring their financial burden of receiving inferior quality coal to consumers.

The consumer body has asked the regulator to direct generation companies to claim losses from Coal India Ltd and other suppliers, according to K.K. Bajaj, director (representations) at Consumer Education Research.

In its complaint, the activist group has said that companies such as Torrent Power and state-owned generation company Gujarat State Electricity Corp. Ltd, another subsidiary of Gujarat Urja, have claimed recovery of 62 crore and 160.69 crore respectively from its consumers for getting inferior quality of coal.

Although there has been no substantial hike in regulated tariff in the last few years, distributors have revised prices as fuel adjustment cost. This amount is charged over the tariff price.

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