Ref. : ER/pr/dG/saurabh.17
Consumer Education and Research Society (CERS), Ahmedabad, has
disputed the Minister of Energy for State, Mr. Saurabh Dalal’s
recent statement that the power tariff in Gujarat has not been revised
for the past seven years. He had made the statement in the context
of a tariff revision application filed by Torrent Power Limited.
CERS stated that the tariff is 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 1 April 2004 the fixed charges were revised where 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 the injury of consumers, as it were, by
approving a fuel price and power purchase adjustment (FPPPA) formula
for four State-owned distribution companies (DISCOMS).
This new formula includes any increase in fuel cost and power purchase
costs that may be incurred by DISCOMS. With the implementation of
this new formula, DISCOMS are not worried about running their own
plants as it is easier 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/unit.
The Commission approved this formula, which became applicable from
1 April 2005, and also approved 2 paise/unit as FPPPA charges. Consumers
will be shocked to know that from April 2007 these costs have increased
to 21 paise/unit, amounting to 4.5 to 8 per cent of increase in
the present tariff. If the tariff of the first slab in the residential
category is considered as Rs. 2.70/unit, then today same consumers
are paying Rs. 2.70 + Rs. 0.21 (FPPPA) = Rs. 2.91/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.
Does the Minister still take solace that tariffs have not been revised
since 2000?, CERS has asked.
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. The common consumer may not understand
what fixed charges, variable charges and FPPPA charges are. They
only know how much amount they pay on consumption of one unit. Therefore,
the power sector should refrain from exploiting consumers in Gujarat.
Date : 06/07/2007
Pritee Shah
Place: Ahmedabad
Editor
Insight-The
Consumer Magazine
Opinions, test results and research findings issued through this
Press Release cannot be used in any form directly or indirectly
for advertising, promotional or commercial purpose.
Consumer
Education & Research Centre (CERC) - Copyrights Reserved 2003.