Will continue to fix provisional tariff outside Bengal: CERC

Normally, the regulator fixes final tariff for a period of five years, while provisional tariff is a mid-term arrangement

A day after the Supreme Court refused a stay order on the Calcutta High Court ruling that the Central Electricity Regulatory Commission (CERC) cannot fix provisional tariffs on electricity, based on a case filed by a few consumers of the Damodar Valley Corporation (DVC), a thermal and hydro power generating company, the regulator on Saturday said this will not affect its right to fix provisional tariffs outside West Bengal.

“The court ruling was specific to DVC and West Bengal. Hence, we still have the right to fix provisional tariffs across the country. The court has asked to fix the final tariff for DVC consumers within two months,” said CERC Chairman Pramod Deo. There were reports that the ruling would impact power generators like NTPC and NHPC too, apart from DVC.

Because of the ruling, DVC will have to go back to its previous rate, till a final tariff is fixed. “The apex court has made it clear this case was specific to those 46 DVC consumers, who approached the court. Otherwise, CERC can fix provisional tariff across the country,” said R N Sen, chairman, DVC.

According to company sources, because of non-payment of provisional tariff by consumers due to the legal tangle, it’s revenue losses amounted to about Rs 30 crore per month. “We are waiting for a settlement on this since 2009. Now that the court has directed it, we will wait for another two months,” Sen added.

When contacted, a top official of power major NTPC said the legal battle would have no impact on it, as it followed the power purchase agreement model.

Normally, the regulator fixes a final tariff for a period of five years, while provisional tariff is a mid-term arrangement. According to Ashok Khurana, director general of the association of power producers, rather than going for provisional tariff, which would be on a higher range, the regulator should look to fix unit-wise tariff, as it may be more consumer friendly. “When a new power plant starts operation, the final tariff is fixed only after the entire project is operational. Hence, provisional tariff is bound to be on a higher range, as it may be for supplying power from one or two units,” Khurana added.

The issue kicked off after some DVC consumers moved the Jharkhand High Court, raising objections to a CERC provisional tariff order. According to reports, a ruling by a division bench of the Jharkhand High Court led the case before the Supreme Court and also the Calcutta High Court. The Calcutta High Court ruled that the regulator cannot fix provisional tariffs.