Electricity Rate Hike: Objections, CESC Replies & Rebuttals

Chamundeshwari Electric Supply Corporation (CESC) has proposed a rate hike for 2012 before the Karnataka Electricity Regulatory Commission. It has submitted its reply to MGP's objections to the rate hike. KERC is holding a public hearing at 11 AM on 14-9-11 at the DC's Office in Mysore about the CESC application. MGP will be submitting its rebuttal of CESC replies at the hearing. MGP's objections, CESC replies and MGP's rebuttal of these replies are given below.

Objection No.1: KERC approved the present tariff 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, i) to encourage efficiency of supply companies and ii) 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 EA. It should not be done. 

CESC Reply: The present application is supplemental to the MYT order for 2011-13. TheMYT process is continuous and not one time application. There are certain deferred claims on the above MYT order which has to be claimed in the subsequent APR applications. So the present application is in order and there is no violation of the EA.

Rebuttal: The MYT process is not meant to be continuous. The ESCOMs are supposed to make accurate projections and come before the KERC only once in every 3-4 years. If they can not make accurate projections, hence suffer a loss and ask for tariff revisions every year, there is no point to the MYT system. The lawmakers realized that the ESCOMs should be made efficient and accountable and that is why they have legislated MYT. Unfortunately, the spirit of the law is being violated in Karnataka, since we have filed objections to electricity rate increases before KERC almost every year from 2006 (on 31-7-06, 21-7-07, 9-9-09, 25-11-10 and 25-8-11). This is a travesty of the concept of multi-year tariffs.

Objection 2: Sec.61(g) of EA intends that the tariff should reflect the actual cost of power. Since all the power supply companies 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. The present rates and the proposed rates are identical for all the ESCOMs. 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. 

CESC Reply: CESC is filing the present application based on actual accounts. 

Rebuttal: Not only should the application be based on actual accounts, the tariff asked should also be based on the actual accounts. The different ESCOMs must have different Operations and Maintenance costs and different income-expenditure gaps. How then can they all ask for the same tariff hike? The fact that all ESCOMs have always asked for the same tariffs shows that they are acting as a cartel and are trying to illegally fix the price of electricity in Karnataka. 

Objection 3: Sec.5.9.4 of the National Electricity Policy states that a more regulatory approach of setting standards for energy conservation would be followed. 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. 

Rebuttal: Higher tariff for higher consumption is true in the current proposal, but the tariffs for high and low consumption have come closer because of the common increase. If the tariff continues to be increased by the same amount for all consumers, the gap between the rate paid by energy savers and the rate paid by energy guzzlers will become even less. To see this clearly, let us look at the present rates. The highest rate of Rs. 5 per unit is 238% of the lowest rate of Rs. 2.10 per unit. If the cost per unit is increased by 10 Rs. for all consumers, the lowest tariff would then be 12.10 per unit while the highest would be only Rs. 15.00. So the highest rate will be just 124% higher than the lowest rate. When the gap between the two tariffs keeps going down, there will not be enough incentive to economize and there will not be enough deterrent to wasteful spending. This is a violation of Sec. 5.9.4 of the National Electricity Policy. To be consistent with the NEP, the rate at which the higher slab tariff increases should be much higher than the rate at which the lower slab tariff increases. In the table above, if the lowest rate Rs. 2.10 is increased to Rs. 2.98, the highest rate Rs. 5 should be increased to at least Rs. 7.10. 

Objection 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. Karnataka Human Rights Commission has written to the state government on this issue. The Commission is urged to order an end to such discrimination. 

CESC Reply: CESC is arranging 12 hours of single phase supply to rural areas. The power supply schedule is subject to variation depending on availability. CESC is not discriminating among consumers in arranging power supply. 

Rebuttal: CESC may be arranging for 12 hour supply in rural areas. Is it not giving much longer continuous supply to cities? Is this not discrimination?

V.Mahesha, Mysore Grahakara Parishat 

Restriction Removed On Right To Information Queries

In a recent and significant decision, the Central Information Commission has said that Right to Information queries need not be on a single subject.

In earlier judgments, Chief Information Commissioners Wajahat Habibullah and A.N.Tiwari had ruled that an RTI application should be limited to a single subject matter. If the applicant seeks information on more than one subject matter, he has to file a applications and pay Rs. 10 for each subject matter.

But in the latest order (given by Information Commissioner Shailesh Gandhi on 28-8-11), the CIC has reversed itself. Referring to the earlier decisions, it observes 

"What constitutes a 'single subject matter' has neither been defined in the RTI Act, the rules and regulations framed thereunder and not even by the then Chief Information Commissioners... No parameters have been laid down...by which an applicant and the Public Information Officer can determine whether the information sought pertains to one subject matter. In the absence of any means to determine what tantamounts to 'one subject matter', the PIO can, at his discretion, furnish part information claiming that the remaining information sought in the RTI application pertains to a different subject matter for which a separate RTI application is required to be filed...The exercise of such discretion by the PIO is likely to be subjective resulting in arbitrary curtailment of the fundamental right to information of citizens and unnecessary expenditure of money. In the absence of any clear definition of what 'one category of request' means it would only lead to arbitrary refusals of information under the RTI Act, leading to clogging of the appellate mechanisms." 

Sec. 14 of the Karnataka Right to Information Rules made under the RTI Act says that a request should relate to one subject matter. If an applicant seeks information on more than one subject matter, he should make separate applications. So the limit to one subject matter has been made a part of the law itself in Karnataka (The legality of making such a rule is itself questionable. The function of rules is to support and implement the law under which they are made. But rules can not impose conditions which are absent in the law. So the above Karnataka rule could be itself illegal). 

Despite the fact that the limit to one subject matter has been made a part of the law in Karnataka, the logic of the latest CIC judgment is still applicable. KRI Rules also do not define what constitutes a single subject matter nor do they lay down parameters by which an applicant and the PIO can determine whether the information sought pertains to one subject matter or more than one. So Sec. 14 of the KRI Rules which limits RTI requests to one subject matter can not be enforced according to the latest CIC decision. 

But there are no clear rules of precedence in the Right to Information framework. So the State Information Commission need not follow the judgments of the Central Information Commission and an Information Commission is not even bound by its own earlier decisions. As a result, the next time an Information Commission faces the single subject problem, it can rule in any way.

Maj.Gen. (Rtd.) S.G. Vombatkere, Mysore Grahakara Parishat 

Dangerous Road Hump On KRS Road

KRS Road which was closed for more than a year has been finally reopened for traffic after major upgradation. An unwelcome feature of the upgraded road is the road hump between the Railway Museum and the LIC building.

This has already caused several accidents especially at night, since there are no street lights.

The Indian Roads Congress (IRC), a consultative body consisting of the top experts on the subject has published the definitive guidelines (IRC: 99-1988) on the construction of road humps. These guidelines say that road humps are meant mainly for residential areas and minor roads. Their use on major roads is not considered good engineering practice and IRC explicitly discourages it. So one probably should not have a road hump on KRS Road. 

According to the guidelines, a driver should not lose directional control when crossing the hump. But auto drivers tell us that several two-wheeler drivers are losing control over this hump. The reason seems clear. The guidelines suggest a design with a height of 4 inches and a width of 12 feet for controlling the speed of two-wheelers and cars to 25 kmph. This can be used on roads on which heavy traffic is very rare. If there are many busses/lorries plying such roads, they will feel a fairly severe jolt at 25 kmph and so the vehicles will cross the hump at lower speeds forcing the following traffic to speeds much less than the safe speed. For roads on which lorries and busses are the dominant traffic, the width of the hump must be increased to 16 feet to limit the speed of such traffic to 25 kmph. 

It is seen from the photo that the hump on KRS road is about 6 inches high and only 5 feet wide. It is no wonder two-wheeler drivers lose control over the vehicles when crossing it. Busses and lorries almost come to a stop while crossing it, causing more accidents. 

It is not clear who is in charge of laying road humps in Mysore, the Corporation or the police. Whoever it is, it is clear that the IRC Guidelines are not being followed. It is doubtful if any of the road humps in Mysore meet the above specifications. Badly designed road humps instead of reducing accidents, worsen the problem. 

D.V. Dayanand Sagar, Mysore Grahakara Parishat

Badly Designed Bus Stops

Several High Tech bus stops have been built at enormous expense all around the city under JNNURM grants. But they are not well-designed or well-maintained. Here are two examples.

In the bus stop next to Lakshmi Theatre, the seats are too high. Since the seats have no backs, it is easy to lose balance and topple over. There is a deep gutter just behind the bus stop and there is no no protective barrier.

People in general and children in particular can slip and fall into the drain. It is not clear why a protective barrier has not been installed. In the bus stop near Nirmala Convent in Gokulam, there are no seats for the last several months. It is possible that they were stolen after installation, but no one has bothered to replace them.

Without seats, the bus stop is almost useless and people are using the old bus stop. 

D.V. Dayanand Sagar, Mysore Grahakara Parishat

Ward Committees Again?!

It was reported in the media recently that MCC Wards Parliamentary Federation has invited interested persons to apply to become members of Citizens' Committees.

I had become a member of such a committee for my ward last year. But meetings were not held regularly and nothing came out of the meetings that were held. We were told that we can get improvement projects executed and if we raised 10% of the cost, the other 90% would be borne by MCC. We raised a significant amount of money based on this assurance, but the remaining 90% never materialized and the projects never got off the ground.

I am surprised that applications are again being sought for the ward committees. What happened to the old committees? What is the purpose of these committees? If the old committees are being scrapped and new committees formed, will the new committees also not become fruitless soon?

D.V. Dayanand Sagar, Mysore Grahakara Parishat

Immediate Action from MCC Needed

The water distribution system of Mysore is being revamped under JNNURM project. Under the tripartite agreement signed by Mysore City Corporation, Karnataka Water Supply and Drainage Board and Jamshedpur Utilities and Services Company, JUSCO is laying new water lines to every consumer in Mysore.

But the new pipes are being installed only for a distance of one meter inside one's property. It is the reponsibility of the owner of the property to lay the pipes from there to the water meter. It is very difficult to get labour for such a small job. Even if labour can be found, the payment demanded is huge. From the complaints we have received from J.P.Nagar, workers are demanding as much as Rs. 1000-1500. Many desperate home owners are paying this huge amount. As the work progresses, the nearly 2 lakh domestic and commercial establishments in Mysore will face the same problem.

 If JUSCO itself does this work, not only will it be faster, the property owners will also be spared effort and expense. MGP has spoken to both JUSCO and KUWS&DB. JUSCO is ready to do the job only if KUWS&DB which is the paying authority issues instructions. KUWS&DB will issue instructions only if MCC passes a resolution to this effect and gets it approved by the state government. Therefore the proposal of having JUSCO do the entire job, one that may benefit lakhs of property owners in Mysore, hinges on MCC' resolution.

Therefore we request MCC to pass a resolution on the matter and ask KUWS&DB to issue suitable instructions to JUSCO. Let JUSCO publish its rate for laying one foot of pipe. If people find it acceptable, they will get the work done by JUSCO. On the other hand, if they think it is too much, they can get the work done by others.

  

V.Mahesha, Mysore Grahakara Parishat

Fast Courts To Be Set Up To Try Food Adulteration Cases

Food Safety and Standards Act (FSSA) which was passed by the parliament in 2006 itself has finally come into force three months after the gazette notification of the Food Safety and Standards Rules on 5-5-11. FSSA which replaces eight earlier laws (including the Prevention of Food Adulteration Act - PFAA - and orders referring to food passed under the Essential Commodities Act) is in effect all over the country from 5-8-2011. FSSA will govern any establishment connected with food, including shops, roadside eateries and hotels and also advertisements related to food.

 The main features of the FSSA are as follows:

1. A committee of 22 members called the Food Safety and Standards Authority of India has been set up to specify standards with respect to food items and to set maximum pemissible limits for the use of food additives, pesticide residues, heavy metals, etc. in food items. As of now, the standards and limits set by the PFAA hold.

2. A Commissioner of Food Safety has been appointed in every state with the responsibility of effectively implementing the Act. This is a full-time job. S.Selvakumar, who served as MCC Commissioner in 2002-3 has been appointed the Commissioner of Food Safety for Karnataka.

3. A Designated Officer (DO) has been appointed in every district to enforce the act. Dr. D.G.Nagaraj, the surveillance Officer in the District Health Office is the DO for Mysore district. The DO is in charge if issuing (and cancelling) licences to all establishments connected with food (This duty is now being handled by MCC). His responsibilities also include getting food samples tested to see if they meet standards and filing cases under FSSA against persons who sell substandard or adulterated food items.

4. Food Safety Officers (FSO) have been appointed in every Taluk. The FSOs have the responsibility of collecting food samples from various establishments. They can also close down and seal an establishment under certain circumstances. A liability clause has been written into the law and any FSO who exercises his powers in bad faith can be punished with a fine of upto one lakh rupees. H.J.Suryanarayana is the FSO for Mysore city and P.T. Mahadeva is the FSO for Mysore rural.

5. The public can not file a case under FSSA against an adulterator. They have to get the FSO take the sample and then get it tested through the DO. Only a DO or the Commissioner of Food Safety can file a case under FSSA.

6. Cases under the FSSA can not be filed in ordinary courts. To try such cases, an officer not below the rank of Additional District Magistrate has been appointed in all districts as an Adjudicating Officer. He has all the powers of a civil court.

7. An appeal against an order of the Adjudicating Officer lies with the Food Safety Appellate Tribunal. Such tribunals have been established in all states.

8. The Adjudicating Officer and the Tribunal can try cases in summary fashion, i.e., speedily and without the complicated procedures of the Civil Procedure Code. They are similar to consumer courts in this respect.

9. No civil court can take any case over which the Adjudicating Officer or the Tribunal has jurisdiction. An appeal against the order of the Tribunal lies only with the High Court.

10. Penalties for food adulteration have been enhanced compared to the PFAA. PFAA speaks of fines in the thousands while FSSA talks only of lakhs of rupees. If violation of the law results in death, FSSA prescribes a minimum imprisonment of  7 years (extending to life imprisonment).

Some negative aspects of the new law:

11. In the versions of PFAA before 1991, there was an upper limit to insect parts, rodent hair or excreta that could be present in grains, but this restriction has been omitted from later editions of the PFAA. FSSA also omits such restrictions. The reason for this omission is not clear. In the FSSA, the only reference to the presence of insects in grains is Sec. 3(zz)(ix) which says that a food is "unsafe" if the presence of insects in it is injurious to health. Since eating rice weevils is probably not injurious to health, one can sell rice infested with weevils without attracting punishment under FSSA. This is strange.

12. The law seems carelessly drafted in a few places. For example, a purchaser can take food samples from a vendor and have them analyzed. If the food is adulterated, the purchaser is supposed to get the cost of analysis refunded. But it is not clear who will refund the fee, the food analyst, the vendor or the government. It is also not clear who will issue the order of the refund.  Another example of careless drafting of the law is the following. The Adjudicating Officer is required to pass the final order within 90 days from the date of the first hearing of any case, but the law has forgotten to include a time limit for the Tribunal.

C.V. Nagaraj, Mysore Grahakara Parishat

MGP Objections To Electricity Tariff Hike Proposal

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