NGO warns against power tariff hike

PUNE: City-based non-governmental organisation (NGO) Prayas energy group on Friday cautioned the state electricity regulator against approving the power tariff hike proposal submitted by the Maharashtra State Electricity Distribution Company Ltd (MSEDCL).

The NGO alleged that the electricity sector in the state is facing a serious financial crisis and merely granting a tariff hike will not solve the problem.

Speaking at the public hearing organised by the Maharashtra Electricity Regulatory Commission (MERC) on the proposal, Prayas representative Ashwini Chitnis highlighted how the regulator has failed to be a watch-dog as mandated by the law. “The distribution company filed the tariff petition in the last financial year of the control period after a delay of almost two years which left no scope for mid-term review,” she said.

She said the MERC has also failed in undertaking suo-motu public process for implementing the multi-year tariff and/or holding the MSEDCL accountable by using legal provisions. “Given the absence of crucial information and lack of planning, it is highly inappropriate to call this tariff determination exercise a multi-year tariff (MYT),” Chitnis said, adding that the power utility has categorically objected to MYT-based planning and has considered all tariff components uncontrollable.

“Commission has approved such a petition to form basis for public debate which itself is a travesty of the MYT process. Hence, any burden arising from this inefficiency of the commission cannot be passed on to the consumers in the form of carrying cost for deferred payments and/or regulatory assets,” she said. At best this process must be termed as true-up of financial year 2013-14, performance review of FY 2014-15 and tariff determination for FY 2015-16, she added.

“When Technical Validation Session (TVS) for this case (tariff proposal) was held on December 24, 2014, a number of data gaps and serious lacunae were brought to the MERC’s notice. A second TVS based on new information was demanded by all consumer representatives but the MERC chose not to conduct it,” she added.

Industry representatives told the regulator that high cost of electricity was making their businesses economically unviable. “The distribution company was creating obstacles in our path if we want to switch over to other cheaper power sources using the open access facility,” industry representatives said.

Over 50 consumer representatives spoke at the public hearing.

 

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