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CESC seeks lower tariff for next fiscal

Our Bureau

Kolkata , Jan. 28

CESC Ltd, the flagship company of the RPG group, has asked for a lower tariff for 2004-05 compared to 2003-04.

In its petition filed before the West Bengal Electricity Regulatory Commission (WBERC), the power utility has prayed for an average tariff of Rs 4.21 against Rs 4.42 that it had asked for the current fiscal.

The petition has been admitted by the WBERC, which will ask for filing of objections and set hearing dates in due course.

The utility, which turned the corner after a five-year spell of losses, will thus have a 1.4 per cent hike over its current average rate of Rs 4.15. (CESC was only allowed an interim hike of 25 paise per unit in 2003-04 over its average rate of Rs 3.90 set by WBERC for 2002-03, even as a final order on its petition for 2003-04 lies before the Regulatory Commission.)

However, the way the per unit tariff would be spread across CESC's 18 lakh consumers is not clear, since the Courts are yet to decide on the cross-subsidisation issue.

Based on its interpretation of an earlier apex court order, WBERC announced a uniform rate of tariff for CESC in December 2002 making West Bengal the first State where the cross-subsidy element in power tariff was dismantled overnight affecting, in CESC's case, about 14 lakh domestic consumers.

However, subsequently the State Government challenged the WBERC order.

In its petition, the utility has pegged its 2004-05 working capital requirement at Rs 163 crore with total revenue requirement being estimated at Rs 243.2 crore against Rs 251.9 crore in 2003-04.

It said that employee costs on account of salaries and wages would be lower on account of the voluntary separation scheme in 2003-04 that attracted 2,250 applications.

Interest costs have been projected at a lower level with the conclusion of the debt restructuring scheme for the company.

CESC expects a saving of Rs 85 crore in the next fiscal on this account. It has projected power sales of 5,694 million units in 2004-05, including a purchase of 1,137 million units from the West Bengal State Electricity Board.

Power imports from Damodar Valley Corporation have been stopped since 2002-03 following directives from the WBERC in this regard.

Power purchase cost has been pegged at Rs 308.5 crore against Rs 279.9 crore of the current fiscal.

Over 59 per cent of CESC's consumers buy less than 48 units of power per month and its low voltage power sales have been increasing over the years. It has projected 12 per cent sales in this category.

High voltage consumption has been dropping and CESC fears an acceleration in its pace with the enactment of the Electricity Act 2003.

The utility also supplies power to high-tension industrial consumers (sales projected at a lower level in 2004-05), besides the city's Metro Railways.

The tariff petition said that CESC's expenditure on repairs and maintenance will continue to be high due to its requirement of maintaining a high plant load factor, but also due to its ageing plants.

Moreover, high rate of pilferage leads to excessive overloading of plant and equipment, it added.

Of CESC's 1,005 MW capacity, 130 MW is 50 years old, while 375 MW are between 13 years and 20 years old.

It shut down the 60-year old Mulajore plant in November 2003.

PLF of these plants varies between 90.4 and 93.9 for the latest Budge Budge power plant and is pegged at 65 even for its oldest plant.

Transmission and distribution loss has been projected at 18.5 per cent in 2004-05 against 18.7 per cent this year.

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