OERC Tariff Order Puts Govt In A Fix

Bhubaneswar: | Updated: Nov 17 2003, 05:30am hrs
Is Orissa Electricity Regulatory Commission (OERC), the quasi-judiciary body regulating the states power sector, playing to the gallery while passing tariff orders At least this is what appears from the two tariff orders passed by OERC recently.

Curiously, OERC has passed the two orders for 2002-03 and 2003-04 with conditions attac-hed. The commission has look-ed at the state government for absorbing the tariff hike shock. Since the people in Orissa have opposed the tariff hike, OERC perhaps does not want to take any risk for the decision for any upward revision.

Passing a conditional tariff order for the second consecutive year for 2003-04, it has ordered a hike of 30 to 40 paise for domestic consumers.

At the same time, it has said that only if the government takes over the liability there would be a hike. Interestingly, the OERC has spared industrial and commercial users.

While approving the annual revenue requirement for bulk and retail supply licenses, the commission has recognised an interest liability of Rs 93 crore as regulatory assets. It has set December 22, 2003 as the deadline for the government to inform it about its decision. The new tariffs will come into effect from January 1, 2004.

The OERC is supposed to pass clear cut orders so far as tariff is concerned. Instead, it is creating confusion in the power sector by delivering conditional orders, said a senior state government official.

The tariff orders for 2003-04 will cause lot of embarrassment to the government as the commission has effected a hike for domestic consumers, the the official said.

Earlier, the OERC had passed the order for 2002-03 with the condition that there would not be a hike in tariff if the government accepted the corrective measures suggested by OERC as well as the recommendations of the Sovan Kanungo Committee. Eventually, the government had to accept a majority of the correctives to protect consumers from a tariff shock.

The tariff orders, in fact, were finalised in April 2003. However, these could not come into effect because of judicial intervention. The commission had moved the Supreme Court against staying the operation of the orders for 2002-03 and 2003-04.

While the order for bulk supply tariff (BST) and retail supply tariff (RST) 2002-03 would come into force from December 1, 2003, that for 2003-04 would be effective from January 1, 2004.

Though there has been no change in the rates for 2002-03, there has been an upward revision for tariff for domestic consumers in the order for 2003-04. If the state government refuses to accept the burden, domestic consumers will have to pay 40 paise more per unit for the first 100 units and 30 paise more per unit for the next 100 units. The rate of Rs 3.20 per unit beyond 200 units remains unchanged. The current rate for the first 100 units is Rs 1.40 and for the next 100 units is Rs 2.30.

While BST will increase by 7.5 paise per unit, the impact on RST will be 11.5 paise per unit. The commission has granted an RST hike of 7 paise per unit to Wesco, while three other distribution companies Nesco, Southco and Cesco have got a hike of 8 paise per unit. The discoms had demanded a hike ranging from 35 per cent to 40 per cent.