The Commission’s public hearings over power tariff hike proposals or on any other public interest matter are increasingly seen as namesake exercises

Power consumers in the State have pinned high hopes on Andhra Pradesh Electricity Regulatory Commission (APERC), but will it reduce the tariff hike proposed by the distribution companies (Discoms) ?

Whether the APERC will do this remains doubtful if its track record is any indication. The Commission’s public hearings over the hike proposals by power utilities or on any other public interest matter are increasingly seen as namesake exercises. Its response towards consumer-oriented requests made at these hearings had been lukewarm during all the 13 years of its existence so far. All these years, it endorsed the hike by marginally modifying the figures.

In one case, the APERC had let down even AP Transco/ Discoms when they sought review of the power purchase agreements (PPA) signed with private power developers GVK, Spectrum and Lanco and instead, passed an order that went in their favour. The petitions, filed as early as in 2003 by the utilities for rectification of the anti-people clauses in the PPAs, are kept pending even today despite ruling by the Supreme Court that APERC is the ‘sole authority to adjudicate such disputes’.

Deemed generation

The clauses are such that the utilities had to pay even incentive besides regular price against “deemed generation” which was neither generated nor supplied to the consumers. A full-level fixed cost (all costs other than fuel cost) is being paid to these developers even now, as a low level threshold PLF (plant load factor) was fixed for the power stations of these developers at 68.5 per cent against the normal of 80 per cent. Consequently, consumers are made to shell out hundreds of crores annually towards this avoidable burden.

“By its acts of commission and omission, the APERC failed to exercise its legitimate authority to correct the past mistakes of the power sector,” contend M. Venugopal Rao, journalist and M. Thimma Reddy, convener, Peoples’ Monitoring on Electricity, who regularly appear at public hearings.

While seeking relief from this burden, the utilities and these petitioners cited Central Electricity Regulatory Authority (CERA) guidelines but APERC took the stand that CERC guidelines were not binding on it. However, it enhanced the tariff payable to wind energy units on purchase of power from them to Rs. 4.70 from Rs. 3.50 per unit, citing the very CERC guidelines.

While umpteen important public issues are pending disposal, the APERC on which the government spends Rs. 5 crore annually, issued only one order in 2008-09 as pointed in CAG report, and that too to merely endorse tariff hike.