CERS Opposes Any Move To Increase Electricity Charges

Consumer Education And Research Society (CERS), Ahmedabad, in a submission filed before the Gujarat Electricity Regulatory Commission (GERC), has objected to any increase in electricity tariffs for consumers of State-owned power generating, transmitting and distribution companies in Gujarat.

CERS has demanded that these companies must improve their performance and reduce wasteful expenses before they seek any revision in tariff. CERS has also urged the GERC to introduce multi-year tariffs as advocated under the Electricity Act 2003 and the National Electricity Policy.

The wasteful expenses on the present efforts for a revision in tariff every year add up to a large amount in terms of administrative work undertaken and fees paid to well-known advocates, CERS has added. Eventually, according to it, the consumers bear the burden of all this expenditure.

CERS has requested the GERC to direct these utilities to perform as per the standards laid down in the Regulations framed by the GERC. The various technical parameters, eg. plant load factor, station heat rate, auxiliary consumption, specific oil consumption and coal transit losses should be compared with standard parameters before approving any revision in tariff.

The plant load factor of the State-owned utilities was only 67.3 per cent compared to 82.90 per cent of the Centre-owned plants and 85.35 per cent of the privately-owned plants in Financial Year 2005-2006, CERS has added. Due to the low plant load factor, these utilities have to purchase a large amount of power from independent power producers at a high cost and incur huge losses.

CERS has also made distribution companies accountable for poor progress in metering for the agricultural sector. It has highlighted the fact that more than 75 per cent of this sector is using power without meters, thus transferring the burden to other consumers. During 2005-2006, a meagre additional 2.5 per cent of the sector was covered with meters and, at this rate, it will take more than 35 years to get a 100 per cent metering, for which the deadline had been 31 December 2007. It is not clear how the four distribution companies of Gujarat will meet the deadline.

CERS has underlined to the GERC the need for introducing competition in the electricity sector of Gujarat as per provisions of the Electricity Act 2003. Therefore, a uniform tariff should not be granted for all four distribution companies, namely the Uttar Gujarat, Paschim Gujarat, Dakshin Gujarat and Madhya Gujarat Vij Companies.

There is no justification in granting a uniform tariff as the area of jurisdiction, the number of consumers, the consumption pattern, the installation of meters, transmission and distribution losses vary from one company to another, CERS has added. Therefore, the tariff cannot be the same with one company having 5 per cent agriculture load compared to another with 35 per cent load. The revenue recovered from the agriculture sector is hardly 16-17 per cent compared to a consumption of more than 50 per cent.

CERS has requested the GERC to reject these petitions and demanded that the companies file revised petitions after improving their performances and cutting down on expenses.

Date : 15/02/2007
Place : Ahmedabad

Pritee Shah
Senior Director - CERC
Editor, INSIGHT - The Consumer Magazine