The Hindu Business Line : SEBs sidestep power rate revisions despite losses

Flouting norms
Input costs up in most States due to rise in fuel prices
Timely filing of annual revenue requirements crucial to recovering supply cost
`Power tariffs used as political hot potato'

New Delhi , June 25

Well over five years into the power sector reforms process, a majority of State electricity boards continue to flout the mandatory fiscal prudence norm of making annual tariff revision filings before their respective regulators.

Despite the financial mess that most of them are in, only four out of the 29 State utilities filed their Annual Revenue Requirement (ARR) petitions within the stipulated timeframe to get regulatory nod for new tariff orders last fiscal.

This comes at a time when nearly all States saw their input costs go up on account of an across-the-board rise in fuel prices for running their coal- and gas-based stations last fiscal.

Worse, major States such as Maharashtra, Tamil Nadu, Gujarat, Haryana, Uttar Pradesh, and Bihar, are among those that did not bother to file ARR petitions at all.

Karnataka, Rajasthan, Punjab, and Madhya Pradesh, are among the 10 States that filed their ARR petitions subsequent to the March 31 deadline. Notable exceptions were Andhra Pradesh, West Bengal, Kerala, and Orissa. The annual filing of the ARR petition by a distribution utility kicks off the process of retail tariff revision, with the SERC concerned then deciding on the final consumer tariffs based on the petition.

One of the primary objectives for the setting up of SERCs was to delink the process of power tariff fixation from State politics.Timely filing of ARRs and the subsequent issue of tariff orders are crucial for a utility to recover the cost of power supply to consumers.

Generally, while States going to the polls try and avoid tariff petition filings, both the Left-ruled States - Kerala and West Bengal - were creditably among the four that filed their orders in time. "Even after the setting up of SERCs, most States continue to use power tariffs as a political hot potato, clearly at the cost of pushing their boards further to the brink," a Government official said.