The new power tariffs for bulk and retail supplies have come into effectfrom Tuesday.

Last week, Gridco chairman & managing director BC Jena made a presentationon the BST order before the state chief secretary, SB Mishra, to convincethe government that there were several aberrations in the OERC order. TheOERC has allowed a `reasonable' return on the capital base at the rate of 13per cent instead of 16 per cent in accordance with the 6th Schedule ofSupply Act on reduced capital base of Rs 235.27 crore. But, Jena had argued,the transmission company would earn a clear profit of only Rs 6.61 crore asagainst the allowed `reasonable' return of Rs 37.52 crore since OERC hadcalculated the total revenue requirement at Rs 1296.32 crore and a revenueof Rs 1302.93 crore. The OERC had directed Gridco to meet the deficit of Rs30.91 crore through export of power, he said.

Jena had pointed out that the total revenue in a full year after theimplementation of the new tariffs would be lower than the revenue with theexisting tariffs. The total income with rebate will be Rs 1290.50 crore inthe new tariff regime as against Rs 1303.50 crore now.

He said that Gridco had requested OERC to propose a mechanism forappropriation of past losses estimated at Rs 900.30 crore up to the end of1998-99 fiscal and to include it in the current application. However, hesaid, in the opinion of the OERC the past losses could only be appropriatedwhen a surplus of income over expenditure is available with the licensee.But, the commission had allowed Rs 0.68 crore, Rs 57.56 crore and Rs 37.52crore return on investment in their tariff orders passed in 1997, 1998, and1999. Even in its latest tariff order, the bulk supply tariffs for Cesco,Nesco, and Southco had been reduced by 4.80 paise/unit. "In such an event,how surplus is going to accrue to Gridco for the commission to decide theextent to which it can be appropriated towards past losses?" hequestioned.

Gridco has proposed to exclude Rs 400 crore of zero coupon bonds issued tothe Government of Orissa from the computation of capital base as it waslikely to be converted into equity in the current fiscal. However, this hasbeen disallowed by OERC on the ground that the bonds were not yet converted,Jena said.

The OERC has approved a sale of 9769.09 million units (mu) and an averagemonthly maximum demand of 1708.13 mva as against the Gridco's proposal for asale of 9666.71mu and an average monthly maximum demand of 1695.79 mva. TheOERC has allowed a transmission loss of 550.28mu calculated on gross basis,which works out to four per cent whereas Gridco had sought a transmissionloss of 5.51 per cent calculated on net basis. As such, the loss of 407.05muhas been allowed on the volume of sale to the distribution companies onlyand the balance loss of 143.23mu has not been allowed on wheeling of powerto other states although the entire income from wheeling has been consideredas a part of revenue earning. This works out to a loss of about Rs 15 crorecomputed on the basis of average poll cost of 103.36 paise/unit permitted byOERC. Thus the loss allowed is lower than the actual losses, he pointedout.

The amount of power procurement allowed is 10,176.13mu during the yearagainst a proposed procurement of 10,229.90mu which is 3.73 per cent lessthan the actual drawal of 10,570.91mu during 1998-99.

In a bid to force the Gridco to purchase cheap power, the OERC has directedit to procure 3953.42mu power from Orissa Hydro Power Corporation (OHPC)which is 250.65mu more than that proposed by Gridco. But, given theirrigation requirement and the grid conditions it would not be possible togenerate that additional power and transmit the same during the remainingthree months of the fiscal, the CMD said.

He elaborated that Gridco had already procured 2917mu from Hirakud,Balimela, Rengali and Upper Kolab up to December 1999. According to the OERCorder, the balance 1035.84mu are to be drawn from these stations in theremaining three months of 1999-2000.