Tariff hike to reward inefficient discoms, says UCC

The recent decision of the Orissa Electricity Regulatory Commission (OERC) to increase power tariff in the state is likely to bail out the distribution companies reeling under high aggregate technical and commercial (AT&C) losses.

“The decision of the power regulator will help the discoms operating in the state. We have opposed Annual Revenue Requirement application submitted by Gridco, Cesu, Wesco, Nesco and Southco on several grounds. But OERC, without paying any heed to our suggestions, has enhanced the power tariff”, said Dillip Mohapatra, Secretary, Keonjhar Navnirman Parishad, a social organization which had moved the Orissa High Court against OERC decision on tariff hike last year.
The four distribution companies have not been able to bring down the AT&C as approved by the commission, rued Mohapatra. The AT&C loss in the state currently stands at 39 per cent.

Ramesh Mohapatra, President, Utkal Chamber of Commerce and Industry (UCCI), an apex body of industries in the state, questioned the operational efficiency of the four discoms.

“The discoms are unable to bring down the AT&C losses to 28 per cent in five years as per the agreement with the state government and OERC stipulations. We are paying the enhanced tariff for the inefficiency of these companies”, said the UCCI official.

The tariff hike will only compensate the loss making distribution companies and will add to the woes of consumers and industries already hit hard by inflationary pressure and high input cost respectively, Mohapatra added.

It may be noted OERC has decided to raise the power tariff effective from April 1.As per the new rates, the domestic consumers will now be charged Rs 2.20 per unit for consumption of first 50 units. Similarly for the slab 50 to 200 units, the consumers have to pay Rs 3.90, an increase of 40 paise. For 200-400 units and 400 units and above, the charges have been increased by 60 paise and 50 paise respectively.

Verdict on a public interest relating to tariff hike in 2011-12 is still pending in the Orissa High Court which has stayed the rise in the domestic category.

“The principal reason for tariff hike in 2012-13 is the increase in number of electricity consumers, inadequate generation of low cost hydro power to meet growing demands and rise in cost of coal and furnace oil, which ultimately lead to increased generation cost”, read an OERC release.
Source: BS

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