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APERC vetoed Rs139 crore FSA burden

Published: 01st July 2013 10:09 AM  |   Last Updated: 01st July 2013 10:09 AM   |  A+A-

The AP Electricity Regulatory Commission (APERC) disallowed the Rs139 crore burden proposed on consumers by discoms, in form of fuel surcharge adjustment (FSA) for the last quarter of 2012-13.

The APERC allowed only Rs 542 crore to be collected through FSA in the fourth quarter, for which orders were issued on Saturday.

The four discoms have proposed to collect from consumers a whopping Rs 1,137.70 crore, of which Rs 1,031.46 crore is variation in variable costs. The APERC disallowed Rs 139 crore in the variable cost, following strong objection raised by TRS MLA T Harish Rao and CPI state secretary K Narayana at a public hearing recently.

Both the leaders contended that out the total FSA claim of Rs 1,137.70 crore, Rs 1,031.46 crore is towards variation in variable costs. In other words, 91 percent of the proposed FSA claim is because of increase in variable costs. The variable costs claimed to have been incurred by power producers are higher than those mentioned in the Commission’s tariff order for the year 2012-13.

Within this, there is a wide variation in increase in variable costs of coal-based plants of Central generating stations (CGS) and APGenco plants. In the case of CGS plants, variation in hike, on the higher side, is in the range of 6-20 percent. In the case of APGenco plants, it is in the range of 36-71 percent. Both the CGS and Genco plants obtain coal from the same sources, Narayana and Harish Rao pointed out.

They said that like Genco plants, the CGS plants too are using imported coal. However, when variable costs of CGS plants declined, those  of Genco plants increased. When the increase in coal prices did not affect the CGS much, how is it that the variable costs of Genco plants increased by nearly 70 percent, the TRS and CPI leaders wondered.

However, discoms claimed that the APGenco’s variable costs increased due to procurement of imported coal and additional coal by paying premium price, and normal inflationary effect.

The variance in the cost of gas, in IPPs, is due to use of RLNG and increase in foreign exchange rate over a period. Even domestic gas price is reimbursed to IPPs based on dollar converted into rupee.

However, the APERC felt the actual variable costs will change based on market fluctuations and availability of linkage coal. In shortage of linkage coal, the generating companies have to procure either premium coal in the market or import.

However, the bills submitted by the CGS through discoms, which are under purview of CERC, have been prudently checked. The check resulted in reduction of Rs 41.01 crore.

Regarding APGenco stations, they are procuring imported coal duly calling tenders from Central public sector undertakings and orders have been placed with lowest bidder.

Further, in case of shortage of linkage coal, the domestic coal is procured from SCCL at premium price, which is a weighted average of e-procurement price. Due to this, there is variation in average price of domestic coal.

However, while scrutinising the bills claimed by APGenco through discoms, the Commission observed that there is variation of actual quantity of coal consumed and the quantity arrived at based on GCV and number of units (kWh) generated. The value to the extent of Rs 139 crore is disallowed, the APERC said in its orders.

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