BHUBANESWAR: Non-compliance of multi-year tariff (MYT) principles by the Odisha Electricity Regulatory Commission (OERC) has forced consumers to pay through their nose during the pandemic.
Stating that the hefty hike in power tariff for the current fiscal is the outcome of regulatory inertia, experts alleged that the Commission has miserably failed in its regulatory duty of ensuring supply of uninterrupted quality power at an affordable cost to the consumers.
As per Electricity Act, 2003 and regulations for determination of tariff, the aggregate revenue requirement (ARR) and annual tariff is required to be determined by OERC after approving the actual audited figure or business plans in a realistic and prudent manner in accordance with the nature of cost, controllable or non-controllable, for the utility concerned.
However, the ARR and the retail supply tariff (RST) for 2021-22 has allegedly been determined without any valid business plan for the relevant financial year and without considering the figures of the actual audited accounts of the distribution companies (discoms) for the previous year.
And the same practice is reportedly being adopted by the Commission while approving the ARR and annual tariff for Gridco, OPTCL, OHPC and OPGC since 2014-2015.
"The non-compliance of MYT principles as stated above in the proceedings to determine RST, bulk supply price (BSP), transmission tariff and generation tariff is a fundamental error of the tariff orders issued by OERC for current fiscal as well as previous fiscals," said power analyst Anand Mohapatra.
Whereas, regulatory commissions of other states are strictly following the MYT principles for determination of tariff for their power utilities to make tariff competitive, predictable and useful for the growth of power demand that is linked to economic development.
Mohapatra said that the power growth of Odisha has remained within two per cent in last few years and OERC does not wish to take periodic review to know the reason. Equally worrying is the fact that the two State-owned companies OHPC and OPGC are kept outside the annual performance review by OERC since beginning, he said.
"The purpose of the MYT regulations is not just to isolate the controllable and the non-controllable costs. The regulations should be so framed that they bring out the very best from the discom, with an in-built mechanism of rewarding good performance and also have some form of penalties if the performance is below par," said former Finance Minister Panchanan Kanungo.
He added that the State government needs to intervene and issue necessary directions to OERC to determine the tariff as per the MYT framework to safeguard the interest of 92 lakh consumers and to promote the economic development of the State.