The Telegraph
Tuesday , May 17 , 2011
Since 1st March, 1999
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Interim hike in power tariff

Calcutta, May 16: Consumers in Bengal will have to shell out more for power from this month as an increase in price of coal has pushed up tariffs.

The CESC and the West Bengal State Electricity Distribution Company (WBSEDCL) have raised the per-unit price of electricity by 46 paise and 38 paise respectively for April.

The increase will be across all categories of consumers.

Thus, a CESC consumer who uses 200 units of power a month will have to pay Rs 92 more. A WBSEDCL consumer using the same amount of electricity will have to pay Rs 76 more a month.

The interim price hike follows the monthly variable cost adjustment (MVCA), a concept introduced from April 1 by the West Bengal Electricity Regulatory Commission (WBERC). Under the mechanism, tariffs will be adjusted on a monthly basis depending on input costs, giving the utilities greater flexibility in tariff determination.

Earlier, tariff was revised once a year by the regulator. However, the hike under MVCA is provisional and subject to a detailed scrutiny at the end of the year.

All power utilities in the state will have to file reports on at the end of each financial year with the WBERC, which will check the documents to see whether the tariff hikes are in line with their actual cost increases.

It is possible that the regulator may reduce the interim hike marginally and ask the power utilities to return to consumers the excess amount charged.

The MVCA was introduced to take care of coal price swings. Electricity producers were unwilling to wait a whole year to raise tariffs as their costs were shooting through the roof in the intervening period.

State power department officials said today’s hike was aimed at offsetting the increase in coal prices because of the imposition of central excise duty.

“The increase will help us mitigate the sharp hike in coals prices. We will review the hike in power prices every month and adjust accordingly. The tariff could go up or down on a month-to-month basis,” said CESC executive director Dilip Sen.

A senior WBSEDCL official said: “This increase or decrease in power bills for consumers will vary month to month depending on the fuel cost of the generation companies from which we buy power.”

While central power-generation companies such as NTPC are already following the monthly cost-adjustment process, the WBSERC has allowed this for the first time in the state. Some states like Gujarat and Andhra have already adopted the monthly cost-adjustment system.

The CESC hike is higher because the company gets power from its own generation units, several of which largely depend on A-grade coal. Coal India has increased the price of such coal by more than 100 per cent.

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