Haryana Reduces Electricity Tariff to Counter Power Loss

The state government will also begin to incentivize farmers for selling agricultural residue for a new ethanol plant in Panipat

September 12, 2018


Bringing some respite to the power consumers in Haryana, chief minister Manohar Lal Khattar has announced a reduction in electricity tariffs in the state.

Per Press Trust of India (PTI), Khattar announced reducing the power tariff on monthly consumption of up to 200 units from ₹4.50 (~$0.061)/unit to ₹2.50 (~$0.0344)/unit. Announcing further relaxation for the people belonging to poor families, Khattar while speaking in the state assembly, added that in case a family limits its monthly electricity consumption of electricity to up to 50 units, the electricity rate would then be ₹2 (~$0.0275)/unit.

Khattar further said that the reduced tariff would ensure consumers savings of up to ₹437 (~$6.012) on a monthly basis. Hailing it as “a historic decision”, the Haryana chief minister noted that it would benefit 4.153 million domestic consumers in the state.

He also announced that free electricity connections would be provided to those ‘dhanis’ (hamlets) in the state which are situated within one kilometer of ‘Lal Dora’ of villages. Lal Dora refers to land that is part of the village ‘abadi’ (habitation) and is used for non-agricultural purposes only.

Khattar also informed the state assembly of another program which is under the consideration of the state government. Under the program, a cluster of 11 houses within one km radius would be provided free electricity connection. The aim of the government is to ensure that each household in the state has electricity connection.

When contacted, a state government official said, “Looking at the reduced tariff, one may wonder how this will affect the distribution companies or how is the state going to bear the cost of this subsidy? Let me explain. In Haryana, at a point of time the power losses amounted to over 80 percent in certain areas due to defaults, thefts and the like. We have so many villages in this state where people cannot pay beyond ₹4 (~$0.055)/unit or even ₹3 (~$0.0412)/unit for that matter. These people resort to defaulting even if they have a connection and so do those who don’t find it easy to hook on to the grid and go on to use electricity free of cost. This decision is going to change that. It is well-thought out and will result in a greater number of people going for new connections. It will result in huge reduction in power losses, and a steady flow of revenue for DISCOMs, albeit a bit reduced.”

“In the past through ‘Mhara Gaon Jagmag Gaon Program’, we have been able to reduce power losses as well as provide 24*7 electricity to various areas,” added the government official.

Moreover, with a view to address the problem of air pollution due to burning of agriculture residue and ensure additional income to farmers, the Haryana government has also signed a Memorandum of Understanding (MoU) with the Indian Oil Corporation (IOC) Limited for the setting up of an ethanol plant with a 100 kiloliter per day capacity at village Bohli in district Panipat.

Per the MoU, the agriculture residue of 50 km area would be collected for producing ethanol. This ethanol would be utilized by mixing it in petroleum. In return, the farmer will get mutually agreed prices for the agriculture residue.

This again is a great move by the state government as it complements the central government’s renewed push for biofuels. Recently, the central government cabinet, headed by Prime Minister Narendra Modi, approved the National Policy on Biofuels – 2018. Soon after, the Government of India imposed restrictions on the export and import of biofuels. In such a scenario, selling agricultural residue for ethanol production will be a huge incentive for the farmers in the state of Haryana.