The Telegraph
Since 1st March, 1999
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CESC brings down tariff, but not for all

Calcutta, May 24: CESC Ltd, the power utility that serves Calcutta, will lower the tariff for some categories of consumers.

The rates announced by the West Bengal Electricity Regulatory Commission this evening indicate an average reduction in tariff of three per cent for 2004-05, or a drop from Rs 4.15 unit per unit in 2003-04 to Rs 4.03 per unit, in the current year.

It is not yet clear, however, if domestic consumers will benefit from the decline in the average tariff.

On the contrary, domestic consumers in the lowest category — using 25 to 60 units a month — will bear an 11-12 per cent higher burden. The tariff per unit of power consumed will go up from Rs 1.85 to Rs 2.04.

High-tension industrial and commercial consumers as well as Metro Rail will be the real gainers with the tariff for them dipping by 14 to 16 per cent, from Rs 4.90 a unit in 2003-04 to Rs 4.20.

Sumantra Banerjee, the managing director of CESC, said: “This has been possible because of a continuous cost-cutting exercise that the utility has undertaken over the last one-and-a-half years.”

Banerjee cited the reasons for the reduction: sharp cut in transmission and distribution loss and in interest and finance cost, high capacity utilisation of about 80 per cent, higher productivity and lower personnel cost and compliance with the guidelines of the regulatory authority.

“We had earlier said that CESC consumers will see a gradual reduction in tariff and this has been reflected in 2004-05’s proposed tariff structure,” he added.

The utility serves 19 lakh consumers.

The phenomenon of rising tariffs for small consumers and dipping rates for commercial users is a result of the decision to phase out cross-subsidies. Tariffs for domestic consumers had earlier been kept low by charging commercial users a higher rate.

Banerjee added that the regulator had first proposed an average of Rs 4.15 per unit tariff for small consumers, but the rate announced is half of that.

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