Though losses in the electricity sector continue to spiral, FY15 saw the lowest tariff hike in the last three years with regulators in seven of 29 states not even passing tariff orders, reports fe Bureau in Mumbai. The average tariff hike for 22 of 29 states where state electricity regulatory commissions have issued orders is at 6% in FY15, according to credit ratings agency ICRA.
Tariff hikes in FY14 were also muted with an average of 7% across the country. The highest hikes, of 14%, were in FY13 when several states hiked their tariffs in order to avail the central government’s financial restructuring plan (FRP) scheme. The hike was also high due to the fact that several states like Tamil Nadu, Rajasthan and Uttar Pradesh had not hiked tariffs for more than five years at that point. An APTEL directive in November 2011, coupled with lenders taking a stern approach to the rising dues, also helped in the hike. It remains to be seen how lenders react to rising indiscipline in the power sector.