Bhubaneswar, 01/01/2025: Facing a significant revenue shortfall, the state-run power trading utility, Grid Corporation of Odisha Limited (GRIDCO), has proposed a 54 paise per unit increase in the bulk supply tariff (BSP) for the 2025-26 financial year. The company has projected its aggregate revenue requirement (ARR) for the upcoming fiscal year at ₹14,820.37 crore and has requested the Odisha Electricity Regulatory Commission (OERC) to approve a new BSP of 381.84 paise per unit, up from the current 328.20 paise per unit.
GRIDCO justifies the proposed hike by highlighting a projected revenue deficit of ₹1,728 crore at the existing tariff. The income from the sale of power to Odisha’s four distribution companies is expected to be around ₹13,092.36 crore, leaving a substantial shortfall. The proposed increase of 53.64 paise per unit, which amounts to a 16.34% rise, could also lead to higher retail electricity prices, potentially adding to the financial burden on domestic consumers who are already adjusting to higher tariffs following the privatization of the state’s power distribution sector.
According to GRIDCO, the state’s energy requirement for the 2025-26 fiscal year is projected at 40,117 million units, factoring in an estimated 3% transmission loss. The utility’s ARR and bulk tariff filings with OERC point out that it frequently incurs higher costs during peak demand periods, especially in the summer months, when distribution companies often draw more power than scheduled. “In such situations, GRIDCO is obligated to pay at a higher rate and suffers huge deficits due to unforeseen additional costs that cannot be adequately compensated through the approved BSP,” the petition states.
The petition further highlights that GRIDCO has faced persistent cash deficits over the years due to non-cost-reflective tariffs in bulk supply prices, gaps allowed in the ARR, disallowed carrying costs on regulatory assets, and pending BSP dues and other receivables from erstwhile distribution companies prior to Tata Power’s takeover. To manage these cash shortfalls, GRIDCO has relied on working capital loans and long-term borrowings, with total outstanding loans standing at ₹5,969.89 crore as of September 30, 2024. The repayment liability for the 2025-26 fiscal year is projected at ₹1,001.78 crore, which includes loans from commercial banks and securitized dues owed to the Odisha Hydro Power Corporation (OHPC).
In the tariff order for the current financial year, OERC had marginally reduced GRIDCO’s bulk supply tariff from 329 paise per unit to 328.94 paise per unit, while providing a 10 paise per unit relief to domestic consumers. The current proposal signals GRIDCO’s continued effort to bridge revenue deficits and stabilize its financial position while balancing the challenges of rising operational costs and evolving electricity demand in the state.
