Cesc Holds Back Recovery Of Rs 40 Crore

CESC is holding back for some time the recovery of fuel surcharge arrears of about Rs 40 crore at the rate of 10 paise a unit for 1997-98. It is awaiting an early revision of the basic power tariff and will plan the arrear surcharge recovery accordingly. It has also sought the government's permission to revise the provisional surcharge rates for 1996-97 following the revision of the rates for power purchased from the WBSEB.

Though the general feeling is that the rate revision will be announced this month end, no one knows the mind of the state power minister, S K Sen. He has asked the WBSEB to fully exploit the revenue earning potential at the current rate of tariff before asking for a revision. Any revision of tariff has to involve both the CERC and the WBSEB as CESC buys a substantial quantum of the energy from the Board. Yet, end-September may be politically the safest time to take the unpopular tariff increase decision. The opposition will have no scope to launch an agitation during the festive season.

CESC has another reason to delay the arrear recovery though it could well have started from the August `98 bills. The state power department has hiked the provisional fuel surcharge rates from 45 paise to 55 paise a unit, but has not touched the current rates which remain pegged at 45 paise a unit. It is a comical situation where the consumers are paying at a higher rate for power consumed in 1997-98, but, are paying a rate 10 paise cheaper for the power being consumed since April `98. The RPG power utility is also hoping that the state government will realise the irony and allow it to raise the fuel surcharge to 55 paise for the current year. This too will require collection of arrears for six months. If CESC's demand for tariff revision has to be fully accepted, the annual additional revenue will be over Rs 250 crore which will mean an average 45 paise increase for each unit of energy.

The recovery of 10 paise fuel surcharge will mean arrear collections of Rs 40 crore. Yet another Rs 25 crore arrear collection is on the cards as the state government has recently increased the provisional fuel surcharge rates for WBSEB too. On a rough estimate, this will have at least six paise a unit impact on CESC fuel surcharge rates.

Altogether, the average increase in the price of CESC power can be over 60 paise a unit. CESC earned an average of Rs 2.88 a unit from its power sale last year. This can now become nearly Rs 3.50 a unit.

However, the mess will still be far from clear. The fuel surcharge rates have been finalised only till 1995-96. Surcharge rates since 1996-97 remain provisional and collection of arrears will be announced from time to time as and when the accounts are finalised.