In what may come as a relief to power consumers, the AP Electricity Regulatory Commission (APERC) proposes to repeal the fuel surcharge adjustment (FSA) orders from April.
The draft regulation amending the existing APERC Act to repeal the FSA was placed on the website of the APERC on Wednesday.
There is, however, a rider. Whatever FSA that is being proposed to be waived, will be incorporated into the tariff itself at the beginning of the financial year which means that there will not be quarterly imposition of FSA from April which may vary from quarter to quarter. However, the already imposed FSA from 2008 will be collected in due course.
This means that, power tariff will go up every year depending on the increase in the cost of the fuel used for generation of power by the power generation stations.
The APERC invited comments and suggestions of all the interested persons and other stake holders on this matter. The comments/suggestions may be sent to the Secretary/APERC on or before 5 pm on June 11. The APERC will hold a hearing on this matter on June 12
The draft regulation, “Andhra Pradesh Electricity Regulatory Commission (Repeal of Fuel Surcharge Adjustment Formula), Regulation, 2013”, was issued on Wednesday by APERC. The regulation, if finalised, will come into force from April 1, 2013.
The APERC has come up with the proposal for amendment since FSA has acquired the character of a mini-tariff. At the time of presentation of Aggregate Annual Revenue projects to the APERC, the Discoms should indicate their likely cost increase in the fuel or power purchase costs. The commission should take note of such likely increases and allow them to be factored into the tariff.
“Having seen the practical difficulties and various agitated proceedings by consumers during the FSA determination proceedings on various components in FSA and also the facts of calculation of FSA, justified procedure would only be to merge FSA with regular annual tariff by repealing the existing FSA regulations,” the APERC said.
This proposal merges the present fuel surcharge component in the regular annual tariff. The FSA is integral part of tariff and has inherent characteristics of tariff.