Trade bodies, the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) and the Karnataka Small Scale Industries Association (KASSIA), expressed strong objection to the proposed hike in tariff by the Bengaluru Electricity Supply Company (Bescom).
Bescom has proposed ₹1.58 per unit hike in power tariff and the Karnataka Electricity Regulatory Commission (KERC) organised a public hearing in this regard on Monday.
KASSIA, represented by Shrinath Bhandary, former chairman of the energy panel, and Mallappa Gowda, former co-chairman of the energy panel, maintained that any hike should be within +/- 20% of cost to supply as per the national tariff policy. However, they pointed out that Bescom was yet to work out the cost to supply, though it should have been done by 2011.
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Rohit Rao, who represented S.K. Steels Pvt. Ltd., also pointed out that in 2007, the Electricity Appellate Tribunal has stated that every determination of tariff should be based on cost of service for each category of consumers. For this, the supply company should analyse the data, consumer category-wise, before arriving at the actual cost of service.
KASSIA also claimed that HT consumption had reduced by 23% and HT industrial consumers were moving away from Bescom to open access, which was cheaper. Even the LT consumption had seen a reduction. Any hike would compel industries to shut down in the face of stiff competition in the market.
With regard to the proposed hike in fixed charges, Shridhar Prabhu, who represented FKCCI, pointed out that in 2000, the KERC stated that fixed charges should not be collected in entirety, as there would then be no guarantee of supply of quality power. “The KERC had noted that only one-third should be allowed to be recovered,” he said.
Mr. Rao, while demanding special consideration to HT category consumers, said the proposed hike in demand charges would have an adverse impact on the industrial sector.
KASSIA and FKCCI both pointed out the cross subsidy component in supply of power to irrigation pumpsets should be borne by the State Government, but is instead being passed on to other categories of consumers. “The Government is only paying for the power supplied free of cost to metered IP sets. The supply to unauthorised and illegal IP sets is passed on to consumers,” said Mr. Prabhu, who added that even unmetered sales of approximately 11.65%, according to Bescom’s tariff hike application, is being passed on to consumers.
Bescom has also failed to collect dues amounting to several crores from the various departments of the State Government. Mr. Prabhu also said that though Bescom has claimed to be incurring a loss, it had spent ₹3 crore as corporate social responsibility. “Only profit making companies can set aside funds and spend them under the CSR head,” he stated.
With regard to allocation of power, Mr. Rao said the Government should ideally not interfere in this matter, which is actually the responsibility of the KERC. “There is no rationale or technical basis for the interference of allocation of power by the State Government,” he added.
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