Tariff hike to reward inefficient discoms, says UCCI
Nirmalya Behera / Kolkata/ Bhubaneswar Mar 26, 2012, 00:02 IST

The recent decision of the Orissa Electricity Regulatory Commission
(OERC) to increase power tariff in the state is likely to bail out the
distribution companies reeling under high aggregate technical and
commercial (AT&C) losses.

“The decision of the power regulator will help the discoms operating
in the state. We have opposed Annual Revenue Requirement application
submitted by Gridco, Cesu, Wesco, Nesco and Southco on several
grounds. But OERC, without paying any heed to our suggestions, has
enhanced the power tariff”, said Dillip Mohapatra, Secretary, Keonjhar
Navnirman Parishad, a social organization which had moved the Orissa
High Court against OERC decision on tariff hike last year.

The four distribution companies have not been able to bring down the
AT&C as approved by the commission, rued Mohapatra. The AT&C loss in
the state currently stands at 39 per cent.

Ramesh Mohapatra, President, Utkal Chamber of Commerce and Industry
(UCCI), an apex body of industries in the state, questioned the
operational efficiency of the four discoms.

“The discoms are unable to bring down the AT&C losses to 28 per cent
in five years as per the agreement with the state government and OERC
stipulations. We are paying the enhanced tariff for the inefficiency
of these companies”, said the UCCI official.

The tariff hike will only compensate the loss making distribution
companies and will add to the woes of consumers and industries already
hit hard by inflationary pressure and high input cost respectively,
Mohapatra added.

It may be noted OERC has decided to raise the power tariff effective
from April 1.As per the new rates, the domestic consumers will now be
charged Rs 2.20 per unit for consumption of first 50 units. Similarly
for the slab 50 to 200 units, the consumers have to pay Rs 3.90, an
increase of 40 paise. For 200-400 units and 400 units and above, the
charges have been increased by 60 paise and 50 paise respectively.

Verdict on a public interest relating to tariff hike in 2011-12 is
still pending in the Orissa High Court which has stayed the rise in
the domestic category.

“The principal reason for tariff hike in 2012-13 is the increase in
number of electricity consumers, inadequate generation of low cost
hydro power to meet growing demands and rise in cost of coal and
furnace oil, which ultimately lead to increased generation cost”, read
an OERC release