CERS disputes energy minister's statement on tariff revision

Ahmedabad, July 6 (UNI) City-based Consumer Education and Research Society (CERS) has disputed Gujarat Energy Minister Saurabh Dalal's recent statement that the power tariff in the state has not been revised for the past seven years.

Mr Dalal had made the statement in the context of a tariff revision application filed by Torrent Power Limited.

CERS, in a release here today, said the tariff was being revised under different heads. The last tariff revision was declared in December 2000 and later the Gujarat Electricity Board (GEB) was unbundled into seven entities. From April 1, 2004, the fixed charges were revised, whereby the Gujarat Electricity Regulatory Commission (GERC) succumbed to pressure and put an additional burden of Rs 44 crore on residential, Rs 14 crore on commercial and Rs 7 crore on industrial consumers, amounting to a total of Rs 65 crore.

These charges were significantly increased from 2.7 to 22 per cent for single-phase and 10.5 to 55.9 per cent for three-phase residential consumers. Similarly, the fixed charges were increased from 12.1 to 57.8 per cent for single-phase, and from 7.8 to 89.9 per cent for three-phase commercial consumers.

The GERC added insult to injury of consumers, when it approved a fuel price and power purchase adjustment (FPPPA) formula for four state-owned distribution companies (DISCOMS).

Under the formula, which became applicable from April 1, 2005, DISCOMS agreed to bear any increase in fuel and power purchase costs. As a result, DISCOMS were not worried about running their own plants as it was easier for them to purchase expensive power from independent power producers (IPPS) and pass on the costs to consumers. Roughly the power is purchased at Rs 4.50 to Rs 7.50 per unit as against their own generation cost of Rs 2.55 per unit. The Commission also approved 2 paise per unit as FPPPA charges.

However, from April this year, these costs have increased to 21 paise per unit, amounting to 4.5 to 8 per cent of increase in the present tariff, CERS said.

With this, the residential consumers are paying Rs 2.91 per unit, increasing the tariff by 7.8 per cent. If the revision of fixed charges is considered, then the increase in tariff may exceed 10 per cent, it added.

CERS has warned consumers that the day is not far when this FPPPA formula will become a miscellaneous charges adjustment (MCA) formula, wherein DISCOMs can include all hidden expenses and pass them on to consumers via the GERC. Therefore, the power sector should refrain from exploiting consumers in Gujarat.

UNI