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Costlier Buy Tied to Power Tariff Hike?

TNERC admits TANGEDCO violated its recommendation, prompting participants of the public hearing to call it a toothless body

Published: 25th October 2014 06:03 AM  |   Last Updated: 25th October 2014 06:03 AM   |  A+A-

Power-Tariff

CHENNAI: The Tamil Nadu Generation and Distribution Company (TANGEDCO) purchased power at prices higher than `3.5 per unit, going against the recommendations of Tamil Nadu Electricity Regulatory Commission (TNERC), S Nagalsamy, member of the commission said on Friday.

The commission made the comments during a public hearing on the proposed electricity tariff hike held in the city on Friday. Members of public who gathered at the hearing, which included former electricity board officials, farmers and representatives of public and private enterprises, were unanimous in charging that power bought from private companies at prices higher than `10 per unit was a major cause for the 15 per cent average hike announced by the TNERC.

People raised questions on how the hike was arrived at despite lack of expenditure and revenue statements of TANGEDCO. “For each year, Aggregate Revenue Requirement (ARR) should be filed. But for some reason the TANGEDCO has not filed it. Even if they did not file tariff application, they should have filed the ARR report mentioning their revenue and expenditure. They have given a few details, which we haven’t had an opportunity to verify. Meanwhile, going by the limited information we have regarding TANGEDCO, based on approximation, we have proposed this hike,” Nagalsamy said.

This admission only prompted many to openly term the commission as a toothless body.

According to a statement, TANGEDCO had last year filed its application before the TNERC for final true-up and approval of ARR for 2010-11, provisional true-up and approval of ARR for 2011-12 and APR for 2012-13 based on estimates. The proposed hike was based on these and the multi-year tariff petition for 13/14 to 15/16 along with tariff revision for 13/14.

Pointing out that the new rates would hit the middle class the most, a few members gathered at the meet raised the issue of conducting a public hearing on a rainy day without proper publicity, which had led to a weak attendance. S Nagarao, a senior citizen from Nanganallur said that the subsidised rates should be extended to a bimonthly consumption of 1,000 units from the current 501 and above. Thuyamurthy, a local RTI activist, and Nandakumar, a retired TNEB employee, questioned why the announced plans of replacing tubelights with CFL bulbs at the TNEB head office had not yet materialised. A call for gradual hike in prices, by 30-40 paise at regular intervals, was made by Nagarao.

Ann Josey, an economist from a Pune based NGO, said greater transparency from the electricity boards, especially with respect to publicly available information on the power projects, types of consumers, etc., would add legitimacy to the entire process of public consultation. “Maharashtra was in a similar situation six years back. One of the measures they adopted was designing the load-shedding of cities/areas depending on the corresponding AT&C (aggregate technical and commercial) losses,” she pointed out. However, she said a hike in electricity prices was inevitable.

When questioned about the power plant project delays, which made the actual power produced costlier, the commission said that the Interest During Construction (IDC) was around 50 per cent of the capital expenditure of the project cost, which according to Josey was a very high figure.

There were representations from farmer groups from places including Villipuram and Kancheepuram as well as public sector enterprises like Southern Railway and private sector in the form of Indus Towers and NASSCOM, who unanimously rejected the hike in power tariff.



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