ATE order may trigger stiff tariff hike in Odisha

Consumers in Odisha are poised to be burdened with a steep hike in electricity tariff for the next fiscal if the recent order of the Appellate Tribunal for Electricity (ATE) is implemented.

In a recent judgement, the ATE has directed the state power regulator Odisha Electricity Regulatory Commission (OERC) to raise electricity tariff in the state after accepting the contentions of Reliance Infrastructure managed distribution companies (discoms) - North Eastern Electricity Supply Company of Odisha Ltd (Nesco), Western Electricity Supply Company of Odisha Ltd (Wesco) and Southern Electricity Supply Company of Odisha Ltd (Southco).

In the judgement, the tribunal has directed OERC to recognise the unsustainable distribution loss incurred by Reliance Infrastructure managed discoms and asked OERC to recover the same through tariff hike.

The ATE has passed the order setting aside different tariff orders of OERC since 2006-07. Implementation of the tribunal's order may lead to an unpalatable situation requiring consumers to pay through the nose for electricity consumption for the past years as per the revised tariff. Should the ATE order be implemented, the tariff hike could be in the range of Rs 5-6 per unit, meaning a burden of around Rs 5,000 crore on the consumers.

Unless the state government challenges the ATE order in a higher court of law, the consumers are destined to suffer. Being a quasi-judicial body, OERC has very limited scope to provide relief to the consumers under statute.

Suresh Mohapatra, principal secretary (energy), Odisha was not immediately available for comments on the matter. It may be noted that for 2014-15, the OERC had spared consumers from any hike in electricity tariff after raising it for four successive years since 2010-11.

Despite the distribution companies (discoms) projecting a distribution loss of 32.4 per cent, the commission considered an average distribution loss of 21.38 per cent for determination of retail supply tariff for consumers for 2014-15.