State electricity consumers may be in for a jolt in the New Year with a possible steep hike in power tariffs. The per unit cost can go up as high as Rs 5 to 6 per unit and as if to add insult to the injury, it would be effective retrospectively from 2006-07.
With the State Government maintaining a discreet silence over the Appellate Tribunal for Electricity (ATE) orders asking the Odisha Electricity Regulatory Commission (OERC) to compensate losses sustained by power distribution companies (discoms) managed by Reliance Energy by increasing power tariffs, increase in power tariff in the State seems inevitable with a burden of about Rs 5,000 crore being passed on to consumers.
The ATE in its verdict has ordered for compensating discoms by revising power tariff in the State from as early as 2006-07 retrospectively. The ATE's verdict has put the OERC in a difficult situation. It is not yet clear whether the OERC will be accepting the verdict or would challenge it in higher court. The State Government's silence over the matter and leaving it to the OERC to take a call is like indirectly coaxing it to accept the arguments of Reliance Energy. The State Government or the OERC failing to get a stay order at a higher court against the ATE orders will end up in financial burden to around 50 lakh consumers in the State.
Though Energy Minister Pranab Prakash Das is aware of the ATE's orders, he told that OERC is yet to inform him. He said whatever steps will be required will be taken by the OERC. Reliance Energy managed discoms Nesco, Southco and Wesco in the State had moved ATE against the verdict of the OERC. The discoms had mainly appealed at the ATE for hiking of power tariff. According to available reports, the OERC has been reducing tariff by setting a target to reduce distribution losses by 21 per cent. The discoms, on the other hand, have been arguing that even reducing distribution losses by three per cent per annum is a difficult task.
The discoms during the hearing also argued that as a consequence of it they were sustaining huge losses. In order to reduce distribution losses, the discoms need to develop and make improvements in their infrastructure. These companies are neither showing interest for it nor are making any investments in this front. The CAPEX programme of the State Government has also lost its direction, opine experts on conditions of anonymity. Moreover, discoms are self-assessing their losses which is being accepted by the OERC. Consumer bodies have been demanding third party audits. However, no steps have been taken on this account, not even by the Government, rue experts.