Do rural residential electricity consumers cross-subside their urban counterparts?
Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.
Santosh Harish and Rahul Tongia examine inequities in supply of household electricity in India, using minute-level data for every feeder across a major utility. Their model and results indicate disparities in load-shedding equate to a welfare transfer, from the rural areas to metropolitan areas or big cities, in the order of thousands of crores/year. This is based entirely on avoided costs of procuring peak power, and does not factor in alternatives, opportunity costs, or value of supply (or outages).
Accompanying the Working Paper are a set of slides summarizing the study as a presentation.