New Delhi, Dec. 19: A legislative labyrinth stares at the West Bengal State Electricity Regulatory Commission’s recent order to impose a uniform tariff regime for CESC customers, even as the state government prepares to go to court on the contentious issue.
The parliamentary standing committee, which was asked to pore over the provisions of the Electricity Bill 2001, has reached a broad consensus on the knotty problem of a uniform tariff for all classes of consumers.
The panel has suggested that within six months of the enactment of the legislation, state governments must notify a time-frame by when they will phase out cross-subsidies for power and move towards a uniform tariff regime.
This provides a legislative escape hatch for the West Bengal government, which has been battling the state commission’s order to enforce a uniform rate regime with immediate effect.
There are two reasons for this. First, the Bill has to be passed in Parliament and the earliest it can go through is the budget session.
That has to be followed up by Presidential assent and notification in the gazette after which the Act comes into force. Take another six months, by when all state governments must commit to a time-frame for removal of subsidies and we are looking at a prospect where the principle will not be enforced for well-nigh two years, if not more.
Second, there’s nothing in the proviso that the MPs have agreed on which sets a deadline by when the states must switch over to a uniform tariff regime, leaving this decision entirely to the states.
The 45-member standing committee, under the chairmanship of Sontosh Mohan Dev, submitted its suggestions on the “Electricity Bill 2001” to the Lok Sabha today.
“The committee had observed that there was no mention of any time-frame to bring tariff in line with cost of supply to each consumer class,” its report says.
“The committee felt that this might give wide discretion to different state commissions to continue with the existing distortions in price of electricity and, therefore, desired that this might be rectified by incorporating a time-frame whereunder tariff might be brought in line with the cost of supply of power.”
“This time limit could be notified by each state governments within six months time from the coming into force of this Act,” the report says.
While the recommendations of the report were unanimous, two members — CPM’s Basudeb Acharya from Bengal and CPI’s Raghavan from Kerala — had objected to a clause seeking the removal of cross-subsidy in the power sector.
“We deliberated for about a year on various aspects of the power sector and held discussions with many state electricity boards and power ministry officials before finalising our suggestions” Dev said.
“It is aimed to help enhance the reform process in the power sector while taking into account the needs of each state government,” he told The Telegraph.
The WBSERC has said that it ordered a uniform tariff regime for CESC because this was the only option left after a Supreme Court ruling in the case which remitted the issue to the commission.
The Supreme Court had ruled that under the scheme of the statute, subsidy could be provided by the government but not by way of cross subsidisation.
“The state government must compensate the company to the extent of the subsidy provided,” the court had said, leaving little room for tariff manoeuvring.
According to a senior official in the power sector, “The Electricity Bill pending before Parliament has a clause that provides for phasing out cross-subsidy. The committee, while reiterating the point, has asked the state governments to specify a definite time-frame for phasing out the subsidy.”
The committee, in its report, has noted that there has been a quantum jump in subsidy made available in the power sector to different shades of consumers during the last 10 years. It has observed that a suitable mechanism needs to be evolved to better target and direct subsidy to deserving consumers in a transparent manner.
It has suggested that a provision be made in the Bill that subsidy can be administered only through departments concerned and ministries such as agriculture, rural development and minor industries.
They could procure power at approved rates and provide the same to deserving consumers.