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Removing Fuel Surcharge Might Push Up Electricity Prices
High Court asks KSERC to reconsider cancellation of thermal surcharge | By Yentha
On Sep 01, 2010

 

Trivandrum: Quashing the thermal-surcharge might increase electricity prices in the long run, a senior authority in KSEB told Yentha. He alleges that the actions of the Regulatory Commision are unfair.

“We were able to recover only Rs 55 crore, out of a total loss of Rs 190 crore  incurred in the previous year,” he adds.

“The ever-increasing gap between income and expenditure has forced us to get overdraft from banks at a high interest rate. Even if the citizens may be temporarily free of a surcharge, thanks to the commission’s decision, they’ll have to pay a higher price in future. The board would have to further increase tariffs to pay bank-interest, which only makes things worse. Such decisions by the commission will push the ailing State Electricity Board to the brink,” he warns.

Yesterday the High Court sought the Kerala State Electricity Regulatory Commision (KSERC) to reconsider the State Electricity Board’s (KSEB) review petition on fuel surcharge. KSERC had earlier ordered a withdrawal of the thermal surcharge the electricity board levied on its consumers.

Acting on a petition filed by the board, Justice C.T. Ravikumar  directed that the current situation be left as-is, until the commission acts on the board’s petition.

Nearly 55% of KSEB’s energy is obtained from costly thermal power plants. Each year, an approximate cost of Thermal Power is calculated by the regulatory commission in advance, and the electricity prices are fixed in accordance with this. If the price of thermal electricity shoots up in a quarter, the Electricity Board is permitted to levy a surcharge in the same quarter(April-September) next year  to cope with the losses. The surcharge of 25 paise per unit during April - September 2010  was calculated on the basis of an excess expenditure of Rs 190 crore in April - September, 2009.

The regulatory authority has stipulated that the board should furnish documents regarding sales of each month, by the 15th of next month. However, the KSEB expressed difficulties in keeping the deadline, citing reasons that electricity billing is bimonthly, thus making monthly-billing impossible. Consequently, the board failed to meet the deadlines. On a complaint from CVC (Consumer Vigilance Center), the regulatory commission ordered a suspension of the surcharge on 31st August - which originally would have lapsed only on the 30th of September.

Removing Fuel Surcharge Might Push Up Electricity Prices-Yentha Trivandrum


“The documents were supposed to be submitted by August 10th, according to a commission-directive. But three days earlier, on August 7th, the commission took action ,” explains the official who wishes not to reveal his identity.

 

N. Rajendran, a retired Government servant had inquired into the functioning of KSEB by asking 26 questions through the provisions of the Right to Information Act. “The finances of KSEB are not transparent,” he says. “According to the statistics available in the Regulatory Commision’s website, the board. is not facing a financial crisis as claimed. Besides, the board computes its revenues through different quantities - ARR (Accumulated Revenue Recovery) and ERC (Expected Revenue from Charges) which are not accurate. And KSEB’s revenues from peak hour excess-electricity sales are not included in any of the reports,” he alleges. “In this context, I think it’s a crime to impose surcharges on citizens, citing impossible reasons,” he adds.

Citizens are concerned about increase in power tariffs. “Any hike, even if it’s  25 paise per unit, would be astronomical to me in the long run,” exclaims Sundaram, an entrepreneur who runs a small manufacturing unit. “Electricity bills are my biggest expenditure and I’ve only started up. If prices continue to shoot up,  I’ll have no option but to shut shop,” he laments. Vasanthy, a housewife has similar concerns. “The logic beyond this price-hike goes way beyond our heads. But in the end, it’s us householders who feel the pinch,” she says.

As long as the bulk of our electricity demands are met by costly, polluting thermal power sources, the situation shall only continue to devolve.

 



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