Financial Daily from THE HINDU group of publications
Saturday, Dec 14, 2002
Industry & Economy
Bengal Govt set to take on power regulatory body
KOLKATA, Dec. 13
WITH only days to go before the West Bengal Electricity Regulatory Commission's (WBERC) expected announcement regarding the CESC tariff, the State Government kept its gunpowder dry ready to fire a salvo in the High Court and pursue matters at higher courts, in case the regulatory commission decided to do away with cross-subsidies in a single shot.
In his first press statement, since the October 3 Supreme Court order reversing an earlier High Court order and directing the WBERC to rework the CESC tariff, Mr Mrinal Banerjee, the State Power Minister, told a press conference, that the WBERC's interpretation of the apex court's order on the cross-subsidy issue was diametrically opposite to that of the State Government.
``In our socio-economic condition cross subsidy cannot be eliminated'', the Marxist Minister said categorically.
The Minister pointed out that schemes such as Kutir Jyoti and Lok Jyoti would become inoperative in the State if the WBERC set about removing cross-susbidies altogether.
``We would like to compensate the State's economically weaker sections in case WBERC did away with subsidies, but we are not really in a financial position to do so'', he said.
He estimated that in case the WBERC recommended a single tariff on the basis of the CESC's average cost of supply (which works out to around Rs 3.90) a subsidy of about Rs 500 crore would have to be paid to compensate the smallest consumers who would otherwise have to pay a huge amount on account of arrears for 2000-01 and 2001-02 the years for which the tariff is being reworked by the Commission.
The RPG-controlled utility, which is now steeped in losses, has a consumer base of nearly 18 lakh of which, 14.5 lakh are domestic consumers. It serves the city and its suburbs.
Mr Banerjee said that since the Supreme Court order which came after some consumer bodies, a chamber of commerce and the WBERC challenged a High Court order (which allowed the CESC a higher tariff that what was allowed by the WBERC) at least nine letters have been exchanged between the State power department and the WBERC.
During the course of these letters Dr K. Bagchi, the State Power Secretary said that the WBERC has set about recommending a new set of tariffs for the CESC without any public hearing and the State Government has not got a chance to put forward its views on issues such as cross-susbidies which affect the interest of the common man.
In a recent letter it sought to remind the Commission that under the Electricity Regulatory Commission Act, 1998, it was empowered to give policy directives to the commission. The WBERC responded by shooting off a letter saying that the State Government was trying to infringe on the indepedence of the Commission.
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