ATE directive – OERC to determine cost-based tariff

With the Supreme Court directing the Orissa Electricity Regulatory Commission (OERC) to wait for the outcome of its revision petition pending before the Appellate Tribunal for Electricity (ATE), the regulatory body is contemplating to seek time for conducting a fresh public hearing to determine cost-based power tariff. While the regulatory commission is all set to start public hearing of the annual revenue requirement (ARR) of distribution, transmission and bulk power supply utilities for determination of power tariff, it would not be possible to determine the cost of power supply for individual categories afresh for 2010-11 and 2011-12.
The ATE while directing OERC to find out the cost of power supply voltage wise for individual category has further asked the regulator to determine the cross subsidy provided by the consumers in the high transmission (HT) and extra high tension (EHT) categories.
As other stakeholders are not party to the present case, the ATE further directed the regulatory commission to give them an opportunity to be heard during the public hearing. The ATE had directed the commission to complete the process by November 30.
The issue figured prominently at the State advisory committee (SAC) meeting of OERC here on Friday. Majority of the members said that the regulatory commission has taken the right course by deciding the power tariff on the basis of average cost of supply.
Determining the cost of power in terms of supply voltage is not only cumbersome but will also hit the consumers in the low transmission category very hard and more so in a regime where there is no Government subsidy, the majority felt.
Determination of tariff on average cost of supply of power is also approved by the national electricity policy, some members pointed out adding, the ATE had also recognised this in its earlier decisions.
The ATE directive to OERC to determine the cost-based tariff and subsidy paid by HT and EHT consumers afresh has triggered a debate on the issue and the Government must make its stand clear on the issue of subsidy, a former member of the commission said.
As per the national electricity policy, power tariff for each category should not be more or less than 20 per cent of the cost of supply. However, the LT consumers, BPL families and agriculture sector are heavily subsidised at the cost of HT and EHT consumers.



Mechanical engineer with experience in Power Plant maintenance , operation and auditing for ISI marked products. MBA in Power Management from National Power Training Institute, Faridabad. Working as Consultant for Bridge to India Pvt. Ltd. Expertise in: 1) Power sector regulations 2) Financial Modelling 3) Project Development solar PV plants 4) Strategic consulting 5) Report writing

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