The Telegraph
Since 1st March, 1999
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Power play on efficiency
- Industry wants pressure on producers with reforms

Calcutta, Dec. 16: Industry is happy to be rid of the burden of power subsidy, but warned that this reformist step would not bear fruit unless accompanied by higher efficiency level at the producer’s end.

The West Bengal Electricity Regulatory Commission today announced a single tariff for all consumers, ending subsidisation of one section by another, leaving it to the state government to choose if it would like to pick up the bill itself.

There was also criticism of the commission for discontinuing the subsidy in one fell sweep, instead of in phases, but the strongest reaction came from the All Bengal Electricity Consumers’ Association, which decided to call a strike in January.

Sanjit Biswas, general secretary of the association, said: “Ninety per cent of the 18 lakh CESC consumers (in Calcutta and Howrah) will be affected. The state government has the power under law to issue a directive against this order and stop it. Instead, the government has taken the decision to move the high court to prolong the process.”

The association will meet chief minister Buddhadeb Bhattacharjee on December 30 and if he fails to take a step, it will call a strike.

Speaking for industry, Nazib Arif, secretary-general of the Indian Chambers of Commerce, said: “In the infrastructure sector, there has to be a proper user charge for quality service. Industry had been asking for this for quite some time. Moreover, it is not justifiable that industry will bear the burden of subsidy for an infinite period of time.”

But he emphasised that the cost of power should be linked to the efficiency level of power plants. “Increasing tariff for one section or reducing it for another will not solve the problem. Pilferage of power should be tackled properly. In the agriculture sector, there is huge pilferage, which should be curbed immediately,” he added.

State electricity board officials said they, too, would now appeal for an end to cross-subsidy. “We have a huge number of Lokdeep and Kutirjyoti category (highly subsidised) consumers. If the subsidy is removed, the government has to decide what has to be done with this huge number of people,” they said.

For industrial consumers, the regulatory commission has introduced a system of rewards and penalties.

For instance, if consumption does not reach at least 20 per cent of the demand contracted with the supplier in a month, the consumer will be penalised at a rate of 20 paise per unit for the shortfall from the 20 per cent level.

Similarly, if consumption is over 80 per cent of the demand contracted, the consumer will get a rebate of 20 paise per unit on the excess consumption. But it must be less than the contracted level. Any consumption above that will attract a penalty of 1 per cent of the total bill. Besides, this higher level of consumption will be treated as the demand contracted.

The power supplier will be penalised if it fails to maintain at least 90 per cent availability. Each drop of 2 per cent or part thereof from this 90 per cent level will call for compensation to the consumer at the rate of 1 per cent of the net energy bill.

The single tariff announced today brings to an end a plethora of rates for various consumers.

The slab-system offered lower rates at lower consumption levels, but not everyone is happy with its withdrawal. “The slabs have been abolished, which is not acceptable to us,” said a senior official of Bharat Chamber of Commerce.

The chamber was a party when the commission moved the Supreme Court against Calcutta High Court’s order, which allowed CESC to bill consumers at a higher rate than what was fixed by it.

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