Shocked parties seek rollback

Chennai: Political parties have urged the state government to take steps immediately to withdraw the 15 per cent power tariff hike effected by the Tamil Nadu Electricity Regulatory Commission as it will affect all sections of the public. DMK president M. Karunanidhi said the hike had been effected without getting the approval of Tamil Nadu Energy Regulatory Commission. “I insist that the power tariff hike effected for the second time should be rolled back,” he said in a statement.

DMDK founder Vijayakanth termed the increase as “unprecedented” and said the ruling AIADMK had earlier effected a hike within months of coming to power in 2012. He termed it as a “betrayal” of the people who had voted for the AIADMK in this year’s Lok Sabha polls, where the party won 37 of the 39 seats in the state.Vijayakanth suggested administrative reforms, prevention of power theft and opting for low-cost wind energy to address the issue of financial losses for state-run Tangedco.

Pointing out the dissent note issued by TNERC member S. Nagalsamy, PMK founded, Dr S. Ramadoss, alleged that the commission had hiked the tariff at the insistence of the state government.“Tangedco could have avoided losses by commissioning projects on time, stopping purchase of power from private producers at '12 per unit,” said CPM state secretary G Ramakrishnan.

Tamil Nadu Congress Committee has announced an agitation in all district headquarters on December 17 against the power tariff hike and the frequent power cuts. “The Tamil Nadu government has announced a 15 per cent hike in power tariff overnight. Due to this hike, people of Tamil Nadu and industries across the state will be affected. Tamil Nadu Electricity Regulatory Commission (TNERC) staged an eyewash by conducting a public hearing meeting only in Chennai, Tirunelveli and Erode,” TNCC president E.V.K.S. Elangovan told reporters here.

“The government has imposed a huge burden through power tariff hike upon the people already weighed down by the power cuts. This showed that the government is not prepared to ameliorate the conditions of the people. The government should immediately roll back the proposed tariff hike,” says BJP state president Dr Tamilisai Soundararajan.

Tamil Nadu Electricity Regulatory Commission member S. Nagasamy, who has given a dissenting order on the proposed power tariff hike, has termed the 15 per cent increase as a “tariff shock”.Mr Nagalsamy has issued a dissenting note to the tariff order issued by the commission on Thursday, alleging that the tariff schedule proposed originally and presently approved were never discussed in the commission.

The commission never met in the last three months, except once for deciding the dates for public hearing. He said when he asked the chairman and other member, they said it was prepared by the consultant.

“When I encountered the consultant with the same question, they disowned the ownership of the tariff schedule. Thus, the tariff schedule was neither prepared and discussed by the commission nor by the consultant,” he said.

In his dissenting note, Mr Nagalsamy wrote that the tariff regulation says that tariff shock should be avoided. Taking into account the escalation rates notified by the Central Electricity Regulatory Commission for various constituents of retail tariff, at the worst the tariff could be hiked by 10 per cent. “Hence, the tariff raise of 15 per cent has no merit and it is construed as a tariff shock,” he said.

After increasing the tariff by 37 per cent to mop up a revenue of about Rs7,800 crore in 2012 and about Rs1,000 crore in 2013, he said now raising 15 per cent is a continuous tariff shock to the consumers.

He pointed out that one of the speakers at the public hearing in Tirunelveli remarked the tariff hike was economic violence. In the current tariff order, the charges for the lift Irrigation, a category of high-tension consumer, is increased from Rs3.50 to Rs6.35 per unit, which is 80 per cent increase: this is a real tariff shock to them, he added. Mr Nagalsamy said there was no need for tariff hike if Tangedco had collected the liquidated damages (LD) for loss of generation of 22,557 million units (amounting to Rs7,418 crore) from the contractors, as per the recent CAG report’s finding, for delay in commissioning of the North Chennai and Mettur thermal power projects.

The delay in commissioning led Tangedco to purchase power from costlier sources. Though the contract has clauses to levy LD and compensation, Tangedco has not yet levied and collected it, he said.“This issue was raised by the public in their written petitions to which Tangedco replied that the delay was beyond its control and will recover LD from contractors. They also have confirmed that they have retention amount to recover the LD,” he said.

Stating that his colleagues in the commission contended that this issue was outside the purview of the tariff order, he said, “But the fact remains that if this LD and compensation is recovered, this will either reduce the capital cost of the projects, or as per accounting standard of ICAI, this amount has to be treated as miscellaneous revenue and to that extent it reduces the revenue gap in the tariff order. With this huge revenue, the increase in tariff is not required.”