Chamundeshwari Electricity Supply Corporation (CESC), which supplies
electric power to Mysore has filed an application before the Karnataka
Electricity Regulatory Commission (KERC) to increase electricity tariffs
for 2012. CESC has called for objections to the rate increase. Mysore
Grahakara Parishat is filing the following objections:
1. KERC approved the present tariff in 2010 as a multi-year
tariff for the years 2011-13. Sec. 61(f) of the Electricity Act, 2003
(EA) mandates multi-year tariffs. There are two reasons for fixing
multi-year tariff rather than annual tariff, to encourage efficiency of
supply companies and to reduce regulatory uncertainty. Fixing the tariff
once again when there are two years left on the original period of the
multi-year tariff defeats the whole purpose of multi-year tariff and
violates the Electricity Act.
2. Sec. 61(g) of EA intends that the tariff should reflect the
actual cost of power. Since all the electricity supply companies
(ESCOMs) in Karnataka have filed for identical tariff increases, it is
obvious that the tariff proposed by them in general, and CESC in
particular, does not reflect the actual cost of power. For example, the
proposed tariffs (energy charges) for LT 2(a)(i) category (domestic AEH)
is as follows:
Present rate Proposed rate % increase
For the first
30 units 2.1 2.98 42
31 to 100 units 3.2 4.08 28
101 to 200 units 4.2 5.08 21
> 200 units 5 5.88 18
These figures are identical for all the five ESCOMs in
Karnataka. Last year also, the five ESCOMs had applied for identical
tariff increases. The actual cost of supply of power for all these
companies can not be the same to the last decimal place when one takes
into account, the different locations, different distances to power
sources, different demographics and different costs of living. It is
clear that the ESCOMs have not determined the cost of power supply in
any scientific manner, but are presenting fictitious numbers. For this
reason, the tariff hike proposed by CESC should be rejected. The ESCOMs
have been always submitting identical tariffs and MGP has requested KERC
to direct them to cease this practice and determine the actual cost of
power supplied.
3. Sec. 5.9.4. of the National Electricity Policy emphasizes a
more regulatory approach to setting standards for energy conservation.
The most obvious regulation to promote energy conservation is to have
higher tariffs for higher consumption. Increasing the tariff by the same
amount irrespective of consumption goes in the opposite direction. In
the table above (Item 2), the tariff has been increased by 0.88 Rs. for
all consumers. This works out to 42% increase for consumers who practice
energy conservation and just 18% increase for consumers who waste
energy. Such a rate increase defeats the aim of the National Electricity
Policy. Since Sec. 61(i) of the EA mandates that the National
Electricity Policy must be followed in fixing tariffs, the rate increase
also violates the law. Rightly, it should have been the other way
round, 18% increase for the lowest slab and 42% increase for the highest
slab.
4. Rural areas are suffering heavy power cuts in contrast to
urban areas. This discrimination by CESC is against both equity and Sec.
5.1 of the National Electricity Policy. Electricity Regulatory
Commissions of other states have acted to stop such discrimination. For
example, in an order given on 5-5-2006, the Punjab ERC has ruled "The Commission further
decides that the (Punjab State Electricity) Board should take adequate
steps to minimize discrimination amongst consumers of different
categories especially rural and urban domestic consumers as far as
possible while imposing power cuts." In another order issued on
18-5-2007,
PERC said "The Commission notes that there is disparity in the
imposition of power cuts especially in the case of some urban centres
and in rest of the State. The Commission observes that this clear
discrimination between two sets of the same consumers seems to be
iniquitous and without any rational basis. It would, perhaps, be best if
power cuts are applied evenly in urban and rural areas of the State. If
on the other hand the Board is still of the view that there are
overriding compulsions to the contrary then it may draw up fair and
transparent criteria that might justify any disparity in the imposition
of power cuts." In a 2009 concept paper on power cuts (pdf)
the Uttarakhand Electricity Regulatory Commission has observed "If all
such feeders are not required to be cut, requisite number of feeders
only may be cut but on rotational basis so that all consumers bear the
brunt of such power cuts" and then again "The practice of exempting some
cities for their perceived importance should be stopped and all urban
areas should be treated similarly." These are some persuasive
precedents. Karnataka Human Rights Commission has written to the state
government on this issue. KERC should order an end to such
discrimination.
Maj.Gen. (Rtd.) S.G. Vombatkere, Mysore Grahakara Parishat