According to the Karnataka Electricity Reform (KER) Act, Electricity Supply Companies (ESCOMs) have to file applications before the Karnataka Electricity Regulatory Commission (KERC) and get its approval for any increase in tariffs. It has been reported that ESCOMs are about to approach KERC once again for an upward revision of tariff. MGP has written to KERC against such an application (copy of the letter is here).
In its letter, MGP has pointed out that tariff increase applications filed by ESCOMs in the past before KERC routinely violated the letter and spirit of the Electricity Act 2003, KER Act 1999, KERC (Tariff) Regulations 2000, and National Electricity Policy. The following are just a few violations of the KERC (Tariff) Regulations 2000: absence of scientific determination of the cost of service (embedded cost) to each category of consumers (Sec.4(5)(iv)), non-submission of audited Balance Sheets (only extracts have been submitted) (Annexe-II), absence of statement of proposed cross-subsidies, amount of such subsidy to the affected consumer category and the source of offset of this subsidy (Sec.4(5)(vi)), absence of a written explanation of the rationale of the proposed tariff (Sec.4(5)(viii)). KERC has repeatedly issued directions to correct these defects but the ESCOMs have ignored these directions and continued to file defective applications. They have been able to get approvals for tariff hikes so far only due to the generosity of KERC.
Such generosity has emboldened these companies to flout the directives of KERC and provisions of the Indian Electricity Act routinely, and the interest of the honest paying consumers has been completely ignored. It has also resulted in these companies frequently challenging the tariff ruling of KERC in the Appellate Tribunal for Electricity (ATE). It is very difficult for the consumers to argue against these challenges because the proceedings of ATE are always held in Delhi. To rub salt in the wounds of the consumer, the legal expenses of these companies in challenging KERC's orders before the ATE are passed on to the hapless consumers through the tariff. It is also well-nigh impossible for the consumers to appeal before the ATE because of the prohibitively high (Rs.1,00,000) filing fee. As a result of all these factors, the regulatory arena has become asymmetric with the ESCOMs having all the advantages and the consumers none.
In light of such irresponsible attitude of the ESCOMs and the abuse of KERC's generosity by them, MGP has urged KERC to summarily reject non-compliant rate-hike applications without even admitting them. It has also urged KERC that if these companies fail to file fully compliant applications within the specified time limit, orders should be passed providing an alternative tariff or amended tariff which will fully reflect the letter and spirit of the KER Act.