The Telegraph
Since 1st March, 1999
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Power tariffs to be linked to customer satisfaction

Calcutta, Jan. 5: The Union power ministry is considering a move to link power tariffs with consumer satisfaction in its new tariff policy.

The ministry has already introduced a ‘reliability index’ calculated in the terms of the number of expected consumer hours and number of consumer hours lost.

The state utilities have been directed to calculate the reliability index at the consumer level from July 1, 2003.

“The aim of the tariff policy is to ensure reliable and quality power to consumers at competitive rates. The Electricity Regulatory Commission Act enjoins the Central Electricity Regulatory Commission under Section 13 (D) and State Electricity Regulatory Commissions under Section 22 (D) to promote competition, efficiency and economy in the activities of the electricity industry,” ministry sources said.

“We are, therefore, thinking in terms of introducing a consumer satisfaction component in the tariff,” officials said.

The ministry has already sought views from all state governments on linking tariffs with consumer satisfaction. “Some of them have written to us. We ware evaluating their views,” ministry officials added.

The regulatory commissions would need to provide a reasonable return to investors and strike the right balance between consumers’ interests and the need to attract and sustain investment. Section 13 (E) of the ERC Act provides for a tariff policy that will be fair to consumers and facilitate mobilisation of adequate resources for the power sector, ministry officials said.

The draft tariff policy also states that consumer tariffs are required under Section 29(2)(C) of the ERC Act to reflect progressively the cost of supply of electricity at an adequate and improving level of efficiency and in the process gradually reduce cross-subsidisation to the minimum. In its draft tariff policy, the ministry also suggested differential tariffs for peak and off-peak hours to flatten the load curve over a period of time.

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