Supply to farm sector: Haryana govt’s subsidy bill to shoot up with power rate hike
Farmers will continue to get highly subsidised power at a tariff of 10 paisa per unit in 2025-26 with the state government continuing its commitment by pitching in with ₹5,400 crore as rural electrification (RE) subsidy in 2025-26 budget estimates.
With the cost of electricity supplied to run agriculture tubewells in Haryana going up from ₹6.48 per unit to ₹7.35 per unit (metered supply) in 2025-26 financial year, the state government would face an increased financial burden of pitching in with a subsidy ₹6,781 crore to keep the farmers happy.
Farmers will continue to get highly subsidised power at a tariff of 10 paisa per unit in 2025-26 with the state government continuing its commitment by pitching in with ₹5,400 crore as rural electrification (RE) subsidy in 2025-26 budget estimates. The RE subsidy amount allocated in the 2025-26 budget, however, will have to be increased.
The Haryana Electricity Regulatory Commission (HERC) which ordered an upward revision of power tariff for domestic consumers with effect from April 1 said in its 2025-26 aggregate revenue requirement and tariff order that about 9,304 million units of electricity will be sold by the two power distribution companies for running agriculture tubewells at a tariff of ₹7.35 per unit.
The regulator said that the power supplied to farm sector will cost about ₹6,841 crore to the two distribution companies whereas the revenue earned at the existing subsidised tariff will be about ₹123 crore. Thus, the distribution companies would need subsidy of ₹6,781 crore to keep the farm sector tubewell supply tariff at current levels.
Pointing out discrepancies in the agriculture pump set sales figures, the regulator has asked the managing director of Dakshin Haryana Bijli Vitran Nigam (DHBVN) to check the sales figures and input energy and submit a report on running of agriculture tube wells on non-AP feeders within a month besides reconciliation of the figures as per the order.
‘Power purchased at higher cost by the distribution companies’
The regulator in its order expressed concern over the costly short-term power purchased by the energy distribution companies during the 2023-24 financial year. While the distribution companies had purchased 7,740 million units of short-term power at an average rate of ₹6.79 per unit in 2023-24, aggregating ₹5,257.54 crore, the same short-term power had also been sold in the power exchange at throw away price. “The Commission observes that power purchase cost constituted around 85% of the aggregate revenue requirement of distribution companies. Therefore, the power procurement plans ought to be rigorously monitored so that the cost of delivered power can be reduced,” the regulator said in its order.
The Commission said there was a need to continuously monitor the price in power exchange so that timely steps can be taken to trade off the cheaper power with costly power. “This will help in more accurate and cost-effective power procurement planning. Further, the share of cost-effective renewable energy may be increased, the regulator said.
‘Measure to flatten power demand curve not taken’
Stating that the power distribution companies have not resorted to adopt adequate demand side management measures to flatten its demand curve including shifting of agriculture pump set load to off-peak load hours of the day, the regulator noted that there was an average gap of 3,000 MW of power on maximum and minimum demand being met every day.
“During winters the energy demand remains in the maximum-minimum bracket of 7,000 MW to 4,000 MW and during summers it remains in the maximum-minimum bracket of 14,000 MW to 10,000 MW. To meet this fluctuating demand, the distribution companies have tied up power purchase capacity of around 15,900 MW,” the regulator said.
