Cesc Overcharged By Rs 95.45 Cr

CESC Ltd had overcharged its consumers to the tune of Rs 35.41 crore in 1993-94, and by Rs 32.41 crore in 1994-95 and by Rs 28.63 crore in 1995-96.

The issue of refunding the amount realised as fuel surcharge to its 1.5 million consumers, however, now rests on the outcome of the report of the S R Batliboi & Company, which is being asked to examine the dispute between the CESC and the West Bengal government on fuel surcharge.

Together, the amounts add up to Rs 96.45 crore. The fuel surcharge for 1996-97 is still to be finalised and may have to wait till the outcome of the settlement of the disputes for the earlier three years.

The D K Bose Committee appointed by the West Bengal government to examine the RPG utilitys claims for additional fuel surcharge of Rs 258 crore, has not only demolished the claim, it also concluded that CESC has already over-charged its consumers for three years. However, the committee had assumed that the increases in surcharge rates allowed to CESC by the state government from time to time was over a base surcharge rate of 18 paise a unit.

Accordingly, he concluded that CESC overcharged the consumers by 6.87 paise a unit in 1993-94, by 1.96 paise a unit in 1994-95, and, by 1.13 paise a unit in 1995-96.

The state power department revised the figures as per the actual rates of fuel surcharge allowed to CESC.

This showed that CESC was allowed a final fuel surcharge of 20.56 paise a unit for 1993-94, 23.44 a unit in 1994-95 and the rate remained at a provisional 23 paise for 1995-96. The company has recently collected the revised amount through arrears collection from the consumers.

Accordingly, within a few months of allowing CESC collect arrears from the final settlement of the fuel surcharge, the same department accused the company of having overcharged its consumers and ordered the refunds of a total of Rs 96.45 crore.

The actual fuel surcharge, the government has now concluded, should have been 11.13 paise for 1993-94 while CESC charged the consumers by an additional 8.43 paise to make the surcharge rate at 20.56 paise a unit. Similarly, the actual surcharge for 1994-95 should have been 16.04 paise. By charging an additional 7.40 paise, CESC actually realised 23.44 paise a unit.

For 1995-96, the actual rate would have been 16.87 paise only while CESC charged a provisional rate of 23 paise - an extra charge of 6.13 paise a unit. If the power departments arithmetic is correct, CESC will need to refund a part of the fuel surcharge it is recovering from its consumers.

The present surcharge rate of 40 paise was fixed calculating on the `final surcharge rates of 20.56 paise a unit for 1993-94 and 23.44 paise for 1994-95.

When the base rate has been found to be inflated, the subsequent increases will be subject to correction.

With the 1996-97 rates awaiting finalisation and the 1997-98 rates too being just `provisional, the CESC consumers can justifiably expect more downward adjustments in their surcharge rates in future.

The questions is: will S R Batliboi & Company uphold the arithmetic done by the D K Bose committee and the West Bengal power department?