OERC says no to changes in cross-subsidy norms

The Orissa Electricity Regulatory Commission (OERC) has refused to change cross-subsidy norms for 2010-11 and 2011-12 that would have favoured industrial power consumers, saying, it will not be possible at the moment as such a move would lead to change in electricity tariff structure, a matter of sub-judice now.

“The re-determination of tariff is not feasible at this stage in view of the stay imposed by the High Court on revision of tariff for domestic consumers for 2011-12 and pendency of the BST (Bulk Supply Tariff), Transmission Charges and Retail Supply Order both for 2010-11 and 2011-12,” the state power regulator said in its latest order in a case filed by the Central Electricity Supply Utility (CESU). As per cross-subsidy policy, the regulators can charge high tension (HT) and extra high tension (EHT) consumers higher than their actual supply cost, to put lesser tariff burden on low-end consumers such as domestic and small industries.

Accordingly, OERC was charging the industrial consumers higher than their actual cost of supply for the sake of cross-subsidy. But HT and EHT consumers had demanded separate tariff determination on usage basis, and not on the basis of average cost of supply for all kind of users.

The state power regulator did not consider their demand and said since both HT and EHT use common lines and meters, it would not be possible to charge the consumers on differential use basis. The industries had challenged OERC order in the Appellate Tribunal for Electricity (ATE).

The ATE had directed the regulator on September 2, 2011, to re-determine cross-subsidy in tariff for HT and EHT consumers, which was later upheld by the Supreme Court of India.

“Since the tariff period of 2010-11 has expired on March 31, 2011, this exercise would be futile as held by the Supreme Court,” the Commission said justifying its decision.

“Similarly, for the year 2011-12 since nine months have already elapsed it would not be possible to collect differential amount from different consumers in case their tariff is enhanced towards later part of the current financial year,” it added. Orissa High Court has completed hearing in domestic power tariff case and reserved the order.

Source: Business Standard

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