Electricity Tariffs to Rise in 2025-26; 54 Paise Increase per Unit to Affect 1 Million Consumers
A new era of higher expenses seems imminent as electricity bills are set to rise. Consumers may have to pay more for electricity, with wholesale power prices expected to increase by 54 paise per unit. This hike will impact over one crore consumers across Odisha.
Proposed Tariff Hike Details
The Odisha Electricity Regulatory Commission (OERC) received a proposal from Gridco to increase the wholesale power tariff. According to the proposal, the wholesale price per unit may rise from Rs. 3.29 (in 2023-24) to Rs. 3.82 by 2025-26. Earlier, during general elections, the state government reduced the tariff to Rs. 3.28 to minimize the burden on consumers.
Gridco submitted its application in November, estimating annual power sales at 38,814 million units for 2025-26. It calculated that an expenditure of approximately Rs. 15,347 crores is needed to meet the required power procurement and distribution costs. For this, consumers must pay Rs. 3.95 per unit. However, if the return on equity is excluded, the requirement reduces to Rs. 14,820 crores, equivalent to Rs. 3.82 per unit.
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Financial Implications
Gridco emphasized that if the wholesale price remains below Rs. 3.82 per unit, the company will face losses. It also highlighted pending dues from electricity companies. During the sale of Wesco, Nesco, and Southco to Tata Power, Rs. 6,588 crores in dues were left unpaid, as of September. Gridco has requested the commission to address this financial gap and ensure recovery within two to three years.
Possible Impact on Retail Consumers
If OERC approves the proposal, wholesale power prices will increase by 54 paise per unit for 2025-26. When distribution company expenses are added, retail electricity rates are expected to rise even further, burdening consumers.
Challenges Ahead
Gridco has also pointed out that delays in resolving dues and increasing tariff rates may cause financial stress on the power supply chain. OERC is now tasked with balancing consumer affordability with Gridco’s financial stability.
This proposed hike reflects the growing challenges in managing the energy sector while ensuring reliable and affordable electricity for the people.
