Stiff opposition likely for power tariff revision

New rates are expected by November

The new tariff is expected by November 2009. The revision has run into rough weather since the consumers are convinced that the Expected Revenue for Consumption (ERC) filed by power utilities is illegal. A hike of 51 paise per unit of power has been sought in the revision. Interestingly, the objections have begun even before the ESCOMs released their tariff details and plans.

Branding the revision as “illegal,” consumers point to the Multi Year Tariff (MYT) sought by the ESCOMs for the years 2008, 2009 and 2010, which has been pending before the Central Appellate Tribunal for Electricity (CATE).

“We are told that the tariff revision is sought because of increase in generation costs due to insufficient rainfall. Though we do not have the details regarding the ERC, on the outset it is illegal as the matter related to Multi Year Tariff  is pending before the Central Appellate Tribunal for Electricity ,” R Nagraj Setty, President, Karnataka State Electricity Consumers Forum, told Deccan Herald.
“The 2010 tariff is neither enforced nor implemented. We are not aware which one has to be amended because the prior tariff will come to an end on March 31, 2010.  But the fact is it is not in force. How can there be an amendment? Definitely, the 2005 tariff which is in force by default cannot be amended,” said a power expert on condition on anonymity.
Timing questionable
M G Prabhakar, President, Energy Commission, Federation of Karnataka Chamber of Commerce and Industries (FKCCI) noted that the timing of the Expected Revenue for Consumption itself is questionable as the next control period starts from April 1, 2010 and the ESCOMs should file 120 days prior to the proposed date of implementation.
“The application for determination of MYT for second control period 2011- 2016 has to be filed on November 30, 2009.”

He said factors such as cost to serve (supply loss for HT users and LT  users) has to be studied and submitted to KERC  for approval.

“Besides, as per the tariff policy, the level of cross subsidy has to be brought down so as to the plus or  minus 20 per cent to the cost of supply. Highest tariff can be 20 per cent above the cost to serve, the lowest could be 20 per cent below cost to serve,” he added.
“Unless these two issues are addressed by ESCOMs, tariff determination will not be in accordance with law,” he pointed out.

However, consumers said that they are waiting to get the copy of Expected Revenue for Consumption filed by Electricity Supply Companies to file their objections. However, the power authorities said that the ERC is filed on the basis of 2005. But he has requested to consider the Multi Year Tariff (tariff as ‘regulatory asset’, which will be part of income and expenditure and it will  be passed on to consumers in the coming years.

‘New tariff in 120 days’

Meanwhile, K P Pandey, Chairman, Karnataka Electricity Regulatory Commission said that the new tariff is expected by November 2009.

He said that he has written to the Electricity Supply Companies  to issue paper publications and the entire process of conducting hearing and issuing orders will be completed within a period of 120 days.

Following this, the public will have 30 days to file objections. “After this process is complete,  the commission will hear and dispose the matter within four months,” said Pandey.