The Telegraph
Since 1st March, 1999
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High court breather for CESC consumers

Calcutta, March 17: Calcutta High Court today stayed an order of the State Electricity Regulatory Commission and asked power utility CESC to continue to extend the benefits of cross-subsidy to domestic consumers and charge them at lower rates till further orders.

Though the division bench of Justices Samaresh Bannerjee and Arunava Barua ordered the retaining of cross-subsidy in the power tariff structure, it upheld the tariffs fixed by the regulatory commission.

In issuing the interim stay order on the abolition of cross-subsidy — in which industrial consumers pay more to help underwrite the cost of supply to domestic consumers at lower rates — the court also effected a decrease in tariffs to the tune of 2.5 per cent.

Turning down the CESC’s plea that it be allowed to continue to bill its consumers at the rate of Rs 4 per unit, as fixed by another division bench, Bannerjee and Barua asked the utility to charge domestic users at Rs 3.81 per unit for 2000-2001 and at Rs 3.90 for 2001-2002.

The second part of today’s ruling upheld the tariff structure that the commission had fixed sometime ago, after modifying the tariffs originally fixed by the other division bench of the same court last year.

“Essentially, the court passed a stay order on cross-subsidy but kept the commission’s ruling of an average cost of Rs 3.90 per unit intact. We have calculated that there would be a decrease in the power tariff per unit by about 2.5 per cent,” said CESC managing director Sumantra Banerjee.

Power minister Mrinal Banerjee welcomed the court’s decision to retain cross-subsidy for the time being. “However, I can give a complete reaction only after I go through the papers in detail,” he said.

The CESC’s domestic consumers were preparing for nearly a 60 per cent hike in power tariffs from this month following the commission’s directive, which abolished cross-subsidy by an order on December 16, 2002. The commission had said power tariffs would be charged uniformly from domestic and industrial consumers.

Bannerjee and Barua directed the respondents — the commission, CESC and the Bharat Chamber of Commerce — to file affidavits by April 3 and the appellant, the state government, to submit its reply by April 17. The matter has been fixed for hearing on April 29.

The counsel for the chamber of commerce, a party in the case, prayed for a stay in the operation of the interim order but the judges rejected his plea.

Appearing for the state, Shaktinath Mukherjee argued that if the commission’s order was carried out, the poor and the farmers would be worst hit.

He also argued that the commission had only the right to fix the power tariff and it could not dictate the government on whether to do away with the cross-subsidy system.

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