Fears arise that minuscule tariff hike, unchanged key rates could strangle the power producer. The West Bengal state power regulator has dealt a double whammy to the RP-Sanjiv Goenka group’s flagship CESC which supplies power to Kolkata and some adjoining areas.
CESC has been allowed to raise tariff by a measly 0.15% or less than a paisa to Rs 6.10 per kilo Watt hour (kWh) for 2013-14, much less than the nearly 1% hike of last fiscal (2012-13) to Rs 6.09/kWh.
The tiny raise would give little leeway to CESC to raise investments for upgrading some of its old infrastructure, meet rising costs of fuel and give out new connections, company officials said.
Worse -- and this is what makes the decision a double whammy – most of the key rates have been kept unchanged. For instance, rates for consumer groups like domestic urban and commercial urban consuming more than 300 units a month have remained same at Rs 7.95 and Rs 7.99 respectively, according to the tariff rate disclosed by CESC on Thursday.
The two consecutive marginal hikes come in sharp contrast to a comfortable 13% raise allowed for 2011-12.
The tariff of 610.66 paisa for this fiscal has been arrived at by allowing Rs 5,710.21 crore as revenue to be recovered through tariff, minus Rs 17.02 crore expected to be received from sale of power to state power utility, and then dividing the net tariff revenue by projected sale of 9,323 million units, the regulator said in its order.
While determining the tariff, the regulator has allowed CESC to purchase power from it at a highest rate of 536 paisa/KWh during the peak period of summer and a lowest rate of 470 paisa during the off-peak period in winter.
CESC has been asking the regulator to allow it to get compensated due to steep increase in coal and other fuel prices and also copper, a major material for electrical plant and equipment, adversely affecting its operation costs.
Also, there is “overwhelming requirement of large and continuous investment to protect consumers’ need of reliable power supply while large-scale developmental activities are taking place in and around Kolkata which calls for matching infrastructure in electric supply,” CESC had said in an annual performance review filing.
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