Bhopal Discoms Push for Higher Electricity Tariffs, Face Expert Opposition
Power distribution companies in Bhopal have formally requested a significant increase in electricity tariffs. They are asking for a 10.19% hike, arguing that without it, they will face a massive revenue shortfall of Rs 6,044 crore in the financial year 2026–27.
Experts Challenge Discom Claims, Advocate for Lower Rates
However, this proposal has met with strong resistance from industry experts. They firmly reject the discoms' prediction of losses. Instead, these experts assert that the utilities are actually on track to earn substantial profits. Their counter-argument is clear: electricity tariffs should be reduced for consumers, not increased.
A major part of the claimed Rs 6,044 crore loss stems from alleged past deficits incurred during 2024–25. The discoms have filed what is known as a true-up petition with the regulator. This petition urges the Madhya Pradesh Electricity Regulatory Commission to permit the recovery of these historical losses from consumers in the 2026–27 period.
Understanding the True-Up Petition Process
Standard regulatory norms govern how electricity tariffs are set. For any given financial year, the regulator determines the tariff based on projected income and expenditure for the upcoming period. Once that financial year concludes and audited accounts are available, discoms may file true-up petitions. They do this if their actual revenue falls short of projections or if expenses exceed earlier estimates submitted in their Annual Revenue Requirement petition. Through these petitions, they seek approval to recover past financial gaps by raising tariffs in future years.
Detailed Objections Filed with MPERC
Retired additional chief engineer of MP Genco, Rajendra Agarwal, has submitted a comprehensive objection to the MPERC against this true-up petition. Agarwal alleges that the discoms have improperly included illegal and time-barred expenses in their financial claims.
In a statement, Agarwal explained that if the commission eliminates these unjustified expenses and correctly applies existing tariff rules, the discoms would show a surplus of approximately Rs 3,160 crore in 2026–27. "Instead of increasing the tariff by over 10.19%, the commission should actually reduce power tariffs," he insisted.
The objection highlights several critical issues:
- The discoms have once again claimed old power purchase costs from 15 to 20 years ago, despite the commission rejecting similar claims in the past.
- Agarwal argues that under the Electricity Act of 2003, utilities cannot recover dues from consumers after a two-year period unless those amounts are continuously shown as arrears.
- He raised serious concerns about other cost components, including an unexplained Rs 832.96 crore listed as "other costs".
- He questioned Rs 2,185 crore claimed for supplementary bills without proper supporting documents or IT verification.
- He challenged Rs 774 crore sought as carrying costs.
Questions Over Loss Calculations and Additional Charges
Agarwal also scrutinized the methodology discoms used to calculate power losses. He stated that they applied higher-than-approved distribution loss figures, which would shift an extra burden of nearly Rs 700 crore onto consumers. According to regulations, he argued, discoms should bear a larger share of such losses rather than passing them entirely to the public.
The objection further flagged several other problematic areas:
- Issues related to the additional capitalisation of past expenses.
- Smart meter lease charges amounting to Rs 197 crore, submitted without proof of audited payments.
- A general lack of clarity regarding how surplus electricity in the state is being managed.
Call to Protect Consumers and Industry
Rajendra Agarwal issued a stern warning. He stated that recovering decades-old costs through current tariffs would severely harm consumers and could discourage new industries from establishing operations in the state. He strongly urged the MPERC to take decisive action:
- Reject what he termed the 'illegal' claims made by the discoms.
- Take strict measures against any non-compliance with regulations.
- Act firmly to protect consumers from what he described as arbitrary and unfair charges.
The debate now rests with the regulatory commission, which must weigh the discoms' request for higher revenue against expert calls for consumer relief and stricter financial accountability.
