Who gets what in Delhi government’s power subsidy plan

Over 1.4 million households in the national capital, which consume 201 to 400 units of electricity every month, will get a maximum subsidy of Rs 800 on their monthly power bills from now on, top government officials said on Thursday.

Delhi chief minister Arvind Kejriwal on Thursday announced that residents who have a power consumption of up to 200 units, will get 100% subsidy on their electricity bills from August 1. Officials pointed out that will be the first time that the Delhi government will be covering up for the fixed charges and surcharges of households falling under this slab.

Under the restructured plan, the government has removed the 50% subsidy clause for those who consume more than 200 units and up to 400 units of electricity every month and has instead made it flexible. Both kinds of subsidies will apply to all domestic consumers subscribed to a sanctioned load of up to 5kW.

WATCH | ‘Electricity free for usage up to 200 units in Delhi’: Arvind Kejriwal

However, normal tariffs will be applicable for those who consume more than 401 units.

“Under the new formula, those consuming between 201-400 units can avail a maximum subsidy of Rs 800 per month in the electricity bills. Despite this, the bills will be even lesser than what people were paying under the ongoing subsidy. This is because the fixed charges were drastically reduced by the DERC under its new tariff order for 2019-20 on Wednesday,” said an official.

The official added that the government chose to offer the revised subsidies only to households having a sanctioned load of up to 5kW because it is in this segment that the DERC made the highest reduction in fixed charges. Those having a sanctioned load of up to 2kW will now save 84% on their fixed charges, whereas, households with more than 2kW but less than 5kW load will save 64% on the same.

Under the new scheme, those consuming between 201 and up to 250 units with a sanctioned load of 2kW will be the biggest gainers as they would get to save as much as 68% on their current power bills, including the ongoing subsidy. “The formula is such that if a household consumes 400 units a month, then it can enjoy the maximum benefit if it has a sanctioned load of 5kW. Which means, if I consume 400 units with a load of 2kW, I would save only about 18.56% of the current bill. But, if I shift to 5kW the savings would go up to 28.43%,” said another official.

Though, Kejriwal while announcing the scheme on Thursday said that the expenditure likely to be incurred by the government on the new scheme is “more or less” going to be the same, officials confirmed that the power department is yet to do the necessary calculations.

This is the second time that the Delhi government has tweaked it power subsidy scheme. Last year, in March, it had changed the scheme after the DERC had increased fixed charges across all slabs — for 2-5 kw, from Rs 35 to Rs 140; for 5-15 KW, from Rs 45 to Rs 175; for 15-25 kw, from Rs 60 to Rs 200; and for more than 25 KW, from Rs 100 to Rs 250. These rates were slashed across three categories (0-2kW, 2-5kW and 5-15kW) on Thursday by the power regulator implying that despite the restricted government subsidy, those consuming more than 400 units to 1200 units and having a sanctioned load of up to 15kW will see reduction in their power bills.

As per the previous subsidy scheme, which was applicable between March, 2018 and July 31 this year, those who consumed between 0-200 units were charged Rs 1 per unit instead of Rs 3, and those using 201-400 units were paying Rs 1.5 instead of 4.5.

In March 2018, the Delhi cabinet had approved a budgetary allocation of Rs 1,830 crore for electricity subsidy in 2018-19.