KERC move on power tariff hike hailed

MYSORE, FEB. 26. The Karnataka Electricity Regulatory Commission (KERC) has declined to approve a proposal submitted by Mangalore Electricity Supply Company (MESCOM) to increase power tariff.

Mysore comes under the jurisdiction of MESCOM and the commission's decision will have a positive bearing on electricity consumers in the region.

In a press release issued here today, G.S. Nayak of Mysore Grahakara Parishat (MGP) said the commission had approved a proposal to reintroduce a special incentive scheme for HT consumers. The four electricity supply companies had taken advantage of Section 27 of the Karnataka Electricity Reform Act, 1999 which allowed one amendment of the tariff order in a financial year. But Karnataka Power Transmission Corporation Ltd. (KPTCL) and the four companies had sought tariff amendment on four issues, Mr. Nayak said.

He said the commission had declined to approve the proposal for increase in power tariff to offset Rs. 1.80 per unit additional charge which was payable to Tannir Bavi Power Company as awarded by an arbitration tribunal. The commission had noted that KPTCL had not argued the case against the additional fixed charge before the tribunal. It had argued that Section 21 of the Act implied that power supply companies discharged their duty wherein every aspect of their activities be motivated by a desire to help consumers.

The commission was not unconvinced that the consumers' interest had been protected by KPTCL and noted that the latter's decision not to challenge the arbitration award in the High Court was transparent. Under such circumstances, the commission noted that it was not willing to pass on the burden of additional fixed charges to consumers, he said.

Similarly, KPTCL had submitted a proposal for power purchase and other cost adjustment (POCA) formula to safeguard its financial interest against the risk of a poor monsoon. If monsoon was poor, local hydel projects would not be in a position to meet the demand, and KPTCL would have to purchase power from other sources at a higher rate. Though the formula was supposed to automatically adjust the tariff proportionately, the proposal submitted by KPTCL did not include this factor. Hence, the commission rejected it, Mr. Nayak said.

Likewise, the commission put an end to the practice by KPTCL and the four companies of charging exorbitant costs for documents related to their applications. The parishat had complained that the cost of "full set'' of applications and supporting documents needed to file objections during public hearings was Rs. 500. But KPTCL and the four companies charged 1,000 per cent more than the actual cost to provide information. Thus, KPTCL was accused of violating the Karnataka Right to Information Act, 2000. The commission upheld the objection and directed the four companies to charge only the cost of the book The commission had approved a special incentive scheme for HT consumers, which entailed power supply at a lower rate and discouraged consumers from going in for captive generation. However, the only part of the order of the commission the consumers might not welcome was the decision to increase power tariff on some classes of LT and HT consumers by an average of six per cent to bridge the revenue gap, he said.