B.S. Satish Kumar

BANGALORE: The filing of petitions by all the five Electricity Supply Companies (Escoms) in the State seeking tariff revision before the State power regulator on Tuesday has raised several legal issues that may force the Karnataka Electricity Regulatory Commission (KERC) to look into the admissibility of the tariff proposal before taking up the statutory task of examining the proposal to determine the quantum of revision.

These legal queries that are being raised by certain consumer associations are expected to be raised before the Commission. The propriety of seeking a tariff hike itself is being questioned in the power sector as the earlier tariff order issued under Multi Year Tariff (MYT) scheme for a control period of three years by the KERC in 2007-08 is still mired in litigation.

Under the MYT regime, a bandwidth for tariff for the control period (in this case it is three years) will be fixed once by the KERC in a bid to provide the stakeholders some kind of certainty with respect to “tariff regulations” so that they can plan effectively towards achieving operational efficiency.

The tariff order issued by the KERC for the first control period of three years is supposed to end only in March 2010. Hence, the propriety of seeking another tariff revision when the fate of the existing tariff order is yet to be decided is being questioned in the power circles.

The MYT system divides various components in power sector into two categories — controllable and uncontrollable components. There is a provision for seeking a revision of tariff within the control period of three years through the review of “uncontrollable” factors such as escalation in power purchase costs. But as per norms, the Escoms should have filed a review petition by November 2008 itself if they were seeking a review of the MYT from April 2009.