The Telegraph
Since 1st March, 1999
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Power tariff hike reversed
- HC asks electricity board to return excess money collected

Calcutta, Sept. 8: Calcutta High Court today set aside an order of the state electricity regulatory commission that hiked power tariff at a uniform rate of 52 paise per unit for all consumers in areas served by the state electricity board, with effect from April.

A division bench of Justice Samaresh Banerjee and Justice S.P. Talukdar said the board will adjust the excess amount taken from consumers since April in future bills.

All consumers outside CESC-served areas will benefit from today’s order. CESC caters to consumers in Calcutta and its suburbs and parts of Howrah and Hooghly.

The court order comes in the wake of petitions by Eastern Railway, Basavi Industries and Indian Rayons challenging the commission’s decision to increase power tariff.

Delivering today’s order, the judges asked the commission to draw up a fresh tariff structure after hearing representatives of all categories of consumers. They said all categories of consumers should not be charged at the uniformly increased rate.

The verdict, in effect, upholds the system of cross-subsidy that the government wants to continue with. Under the system, industrial users pay more so that domestic consumers can pay less.

Board officials admitted that the order would lead to financial losses but declined to comment on the judgment.

The bench, which also heard a government plea on August 1, said its observations that day on different rates for different categories of consumers will also apply in this case.

On August 1, the high court rejected the uniform power tariff structure for domestic and industrial consumers fixed by the commission and asked it to redraw the rates in the areas served by the CESC.

The judges had said while fixing the new tariffs the commission would have the liberty to recommend higher rates for industrial consumers “as they had the opportunity to pass on the burden of tariff hike to their customers by increasing price of their product”. “Domestic consumers should get relief as they cannot pass on their burden.”

Both the verdicts are a blow to the principle of uniform tariff proposed by the regulatory commission and upholds the government’s stand.

The court had earlier said the government had the liberty to decide whether cross-subsidy should continue. The commission had argued that if it were to continue, the government should give it directly to the power utility instead of putting the burden on a section of the consumers.

Power department sources, however, said the government realises that under existing laws, it would not be possible to continue with cross-subsidy forever. “But when the commission abolished it at one go, there was no alternative but to react against it.”

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