The Telegraph
Since 1st March, 1999
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Court orders power surcharge rollback

Calcutta, Sept. 11: Calcutta High Court today ruled that the state electricity board is not authorised to increase tariff by imposing additional fuel surcharge on consumers.

The additional fuel surcharge of 7 paise per unit imposed by the board recently was struck down. Justice P.K. Roy, who passed the interim order, said after the formation of the State Electricity Regulatory Commission, a power supply agency like the board had no authority to raise the tariff.

As a result of the order, power tariff in areas served by the board will go down further. On Monday, a division bench set aside an order of the commission that hiked power tariff at a uniform rate of 52 paise per unit for all consumers in areas served by the board with effect from April.

Today’s order will also be in effect from April 2003.

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

Today’s order was passed on the basis of a petition filed by Birla Corporation challenging the validity of the board’s decision to impose fuel surcharge. Trinamul Congress MP and barrister Ajit Panja appeared on behalf of the petitioner and argued that the decision was arbitrary and went against the Electricity Regulatory Commission Act, 1999. He said the regulatory commission had the final say on all matters relating to power tariff.

“Most state-run power plants are coal fired and when the demand for electricity plummets at late night, generation has to be slowly brought down and the boilers are sometimes fired with the help of furnace oil. If the prices of these two commodities (coal and furnace oil) soar, the fuel surcharge has to be increased,” said an electricity board official.

He declined to comment on the high court ruling.

Today’s order will add to the financial losses of the board, already under pressure following the earlier ruling by Justice Samaresh Banerjee and Justice S.P. Talukdar. The court had also asked the board to adjust the excess amount taken from consumers since April in future bills.

The board was asked to draw up a fresh tariff structure after hearing representatives of all categories of consumers. The court had said that all categories of consumers should not be charged at the uniformly increased rate.

Monday’s verdict had, in effect, upheld the system of cross-subsidy. Under the system, industrial users pay more so that domestic consumers can pay less.

On August 1, the high court had 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.

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