Horizons-January 2014

Posted on February 20, 2014 by

Electricity is a key raw material for industries and one of the basic requirements for other consumer groups – commercial, residential and agricultural.

The economics of power supply are well known. However we have not been able to match the needs of consumers with those of suppliers. The vigorous debate on rising tariffs is only a symptom of deeper structural issues. There is a need therefore, to re-focus on addressing fundamental requirements for a healthy power sector.

What Consumers Want?

It is a challenge for power distribution companies (discoms) to balance supply of adequate power with prices affordable to all consumer segments. Despite the appointment of Consumer Representatives, there is a perception that the tariff setting process is opaque and unfair.

Consumer expectations

In addition there is a lack of long term visibility of cost in the entire supply chain leading to tariff uncertainty. This perception of opacity and uncertainty leads to fundamental opposition to the very concept of hike in tariff.

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