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R.Y. Narayanan

COIMBATORE, March 12

WITH the Tamil Nadu Government reportedly expressing its inability to foot the bill for free supply of electricity to farmers and huts, even while lending its support to the policy of continued free power supply to them, the electricity consumers in the State are keenly waiting for the crucial decision to be announced by the Tamil Nadu Electricity Regulatory Commission (TNERC) on tariff revision on Saturday.

Apart from the issue of revision of tariff for different classes of consumers, which has created apprehensions about a steep hike in power tariff for the second time in two years, what is engaging the attention of the consumers is whether the contentious issue of cross subsidy of power would be dealt with by the commission.

This has become a sensitive political issue with many of the political parties, apart from the farmers' lobby, rooting for continued free power supply to the farmers, particularly at a time when drought has affected the two crop seasons. As this has been a delicate issue, successive governments in the State have tried to tread cautiously.

But the industries in Tamil Nadu have been for years asking the Government not to make the commercial and industrial consumers to underwrite TNEB's loss on this score by levying a substantially higher tariff on them.

Other than the views of the Government and the Tamil Nadu Electricity Board (TNEB), which wants to levy a nominal tariff on power supply to farm pumpsets and huts, what may also weigh with the TNERC is the Supreme Court ruling where it has been stated that it is for the Government and not the power supplier to bear the cost of any subsidised power supply.

But the view of the State Government that the commission should look at alternative options for continuation of free supply of power to farmers and huts has sent alarm bells ringing among the industries who fear that other segments of consumers may have to bear the loss the TNEB may suffer.

In a representation to TNERC sent on Wednesday, Mr D. Balasundaram, Director, Tamil Nadu Electricity Consumers Association Ltd, Coimbatore and Managing Director, CPC(P) Ltd said from published reports it appeared that the State Government wanted the TNERC to `fix tariffs' in such a manner that free power supply to farm pumpsets and huts continued without imposing any financial burden on the Government.

He said this only meant that that the losses incurred by the TNEB for free power supply to agriculturists and huts "is recovered by higher tariffs on the other classes of consumers". He urged that these views of the State Government `should be rejected outright'.

He said instead of footing the cost of free power supply to certain segments of consumers, the Government wanted the TNERC to `impose' this burden on industrial and commercial consumers as in the past. He said industrial and commercial consumers were not in a position to bear this burden.

Mr Balasundaram said the continued economic recession had taken a toll on the industrial consumers and they "face a more severe financial crisis than the Government of Tamil Nadu". Shifting of the Government's burden on them would be "unfair, immoral and illegal" he contended and wanted the Commission to direct the State Government to bear the cost of subsidy.

He referred to the judgment of the Supreme Court in Civil Appeal 4037 of 2002 (West Bengal Electricity Regulatory Commission vs Calcutta Electricity Supply Corporation) wherein the apex court had stated that "the consumers should be charged only for the electricity consumed by them on the basis of average cost of supply of energy."

Further, the Court observed that the statute (ERC Act of 1998) also "obligates the State Government to bear the subsidy which if it requires to be given to any consumer or any class of consumers, should be only on such conditions that the Commission may fix and such burden should be borne by the Government."

The Supreme Court, while stating that it was open to the state government if it so chooses to direct the commission to fix the tariff of supply of electricity to any class of consumers at a reduced rate "provided the State Government itself subsidises the same".

Mr Balasundaram said in the light of the observations made by the apex court, the TNERC should not entertain the views of the Tamil Nadu Government regarding cross subsidisation.

He felt the "Government of Tamil Nadu can't issue directions to TNERC which are against the statutory provisions of ERC Act and the decision of the Supreme Court' referred to by him."

He appealed to the TNERC to fix a single tariff applicable to all consumers of power, leaving the burden of subsidy for any class of consumers to be borne by the Government of Tamil Nadu.

He also wanted that the reported submission of the TNEB before the TNERC to make improvements in the reliability and quality of power supply be made "a part of the condition of the tariff to be approved by TNERC' so that TNEB was bound by its assurances."

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