Bengal To Adopt New Formula To Compute Power Bills

At present, the entire consumption is billed at the rate fixed for the slab in which the consumption falls.

The new formula replicates the existing method of calculating income tax: only the part of the total consumption that exceeds a particular slab will be charged at the rate applicable to the next slab.

West Bengal will be the first state to opt for the new mode of tariff calculation which, sources claim, will be more fair.

The new tariff structure will be introduced when tariff rates are revised next.

The state power department, which had asked both CESC Ltd and the West Bengal State Electricity Board to study the proposed changes in the tariff structure, is now scrutinising the findings.

 

The change, sources said, will increase the total monthly energy bill for some but also reduce the bill for others.

In the current method of tariff calculation, consumption of even one unit more than the slab cutoff may increase the total bill by Rs 200. The entire consumption is then charged at the rate applicable to the next slab.

This irks all those who cross the lower slab marginally and end up paying a higher rate.

However, the new setup will not favour all consumers. Computer studies reveal that the bill will increase by 17-18 per cent for a large number of consumers who fall in the middle of a slab. The power agencies will have to target higher revenues from this section of consumers so that their loss from the other group can be compensated.

The new method of tariff calculation is, therefore, expected to evoke a mixed response with its political fallout.

CESC earned Rs 1,145 crore in 1995-96 from sale of electricity and West Bengal State Electricity Board around Rs 1,450 crore. Together, the two principal power agencies in the state sold power worth about Rs 2,600 crore last year.

Earlier tariff hikes have seen an overall increase in revenue of 12-15 per cent. If the trend is repeated, CESC and West Bengal State Electricity Board consumers have to prepare for an additional annual tariff burden of around Rs 350 crore.

The state power department is assessing the possible and likely repercussions of the move. Opposition political parties may try to extract mileage from this potentially-controversial issue. One of the ideas under study is to announce the change during the coming festive season in October.