Government proposes to end high power tariffs on industries that subsidize agricultural consumers

In a major relief to industrial and commercial establishments, the government proposes to remove cross subsidy charges levied on the large power consumers, power minister R K Singh said on Wednesday.

The minister said the government is planning to amend national tariff policy to remove cross subsidy charges. Presently, the maximum cross subsidy charges as provided in the national tariff policy are 20%. "Some states are charging as high as 100%," : Singh said at a conference organised jointly by the Central Electricity Authority and IPPAI.

"The present system of two - part tariff including fixed costs and energy charges will continure. But we want to do away with the cross subsidy charges. Rather the states should give direct benefit transfers to the targeted consumers," the minister said. He said the ministry will soon decide whether the wheeling costs of electricity will be part of fixed charges or the variable cost.


Th Union power ministry will consult state governments on the removal of cross subsidy charges.