No change in retail power tariff

The electricity consumers in the state can heave a sigh of relief as the retail power tariff applicable for the consumers will not change during the next fiscal starting from April 2009.

The state level power regulator, the Orissa Electricity Regulatory Commission (OERC), after hearing the applications for the approval of the annual revenue requirement (ARR) and retail supply tariff (RST) of the power distribution companies in the state, has disallowed the tariff hike. This will be the 9th year in a row for which the retail power tariff in the state has not been increased.

Apart from the retail tariff, the meter rent has been kept unchanged at the 2008-09 level. Besides, no meter rent shall be payable after the full cost of the meter is recovered.

Similarly, the power factor incentive for HT & EHT consumers will be applicable above power factor of 97 percent from April 2009. Special tariff has been introduced for industries of contract demand 100 MVA and above with a tariff of 237 paise per unit, maintaining a guaranteed monthly off-take of 80 percent.

Prospective small consumers requiring new connection upto 3 KW load will only pay a flat charge of Rs.500 towards new connection excluding security deposit as applicable as well as processing fee of Rs.25.

After hearing the ARR and RST from utilities like CESU, Nesco, Southco and Wesco and the complains made by the objectors, the Commission bluntly told the utilities that their request for increasing retail tariff can be considered only after they are able to reduce aggregate technical and commercial loss.

Besides, they will have to improve standards of performance and take steps to enhance the levels of consumers satisfaction. The distribution licensees in the state namely CESU, Nesco, Southco and Wesco are carrying out the business of distribution and retail supply of electricity in their licensed areas.

Expressing concern about the poor quality of power supplied to all classes of consumers throughout the state, the Commission said that it would like to elicit the views from the consumers on quality of service and also make them aware about their rights regarding performance standards to be achieved by the distribution companies.

As a measure in that direction, the Commission has taken the initiative of putting in place a system and procedure to take feedback directly from the retail consumers including industrial consumers and various government departments.

Similarly, the Commission expressed unhappiness about the non-attainment of a perceptible decline in the level of transmission and distribution loss in spite of reported level of metering in feeders, transformers and at the consumers end. Unless the transmission and distribution (T&D) loss is tackled appropriately, balancing of revenue requirement will continue to pose a problem for these utilities.

In this context, the Commission suggested the introduction of franchisee operations through Panchayat Raj Institutions (PRIs), user associations, NGOs, co-operative societies and such other organizations to reduce loss.

Advising the licensees to move in that direction, it aksed the licensees to achieve the target of loss reduction as approved in the order of the Commission, warning them that the failure to achieve the target can lead to penal action and appropriate adjustment in the ARR while deciding the annual tariff and revenue requirement for the FY 2010-11.

Stating that the financial viability of distribution companies depends on reduction of aggregate technical and commercial losses, improving collection efficiency, realisation of arrears of receivables of consumers, adherence to standards of performance, intervention of IT at all levels, development of call centers for improving the consumers service, it stated that this can be possible with active participation of the consumers, local self-governments bodies in the process.