Kochi: Wither the guardian?

Kochi: The Kerala State Electricity Regulatory Commission (KSERC) has failed to live up to its responsibility as an independent agency protecting the interests of the consumers in the state from unscientific and unjust practices of Kerala State Electricity Board Ltd (KSEBL). The tariff hike approved by the Commission on July 8, more than the amount sought by the KSEBL, shows the failure of the agency to act as an independent regulator, said Dijo Kappan, a consumer activist.

A slew of consumer rights activist organisations have submitted in December 2018 during the hearing held by KSERC that timely collection of the arrears would help the KSEBL to avoid a tariff hike. The regulator has not given the attention deserved by the subject.

The arrears for KSEBL as of now are Rs 2,800 crore and the bulk of the amount is owed by state government utilities such as the Kerala Water Authority. But over Rs 700 crore is owned by private corporate companies and they are having a system of rolling over the debt every year, says N.S. Alexander, RTI activist. “The delay of even a day for the payment of the bill will invite cutting-off of power supply for domestic consumers. "But no such action is initiated in the case of corporate defaulters," he said.

According to Mr. Kappan, the Commission failed to initiate action against KSEBL despite the scant regard shown by the utility for the directive of the Commission for the recovery of arrears. The matter has been brought to its attention during the public hearings.

The Commission has also failed to have a proper assessment of the inordinate delay in the completion of the hydro-electric projects resulting in cost escalation. The avoidance of delay in the completion of a project is one of the well-accepted principles of project implementation, said Mr. Kappan. KSEBL, perhaps, is having the dubious record of having projects waiting for completion for more than a decade, he added.

The laxity in taking proactive measures to tap alternative energy sources such as solar is another major failure of the state-controlled power utility. Although the Kochi international airport has successfully proved efficiency in harnessing solar power the KSEBL is yet to make any initiative to identify potential for setting up such facilities in other parts of the state, Mr. Alexander said.

"A regulatory agency is expected to take a holistic view and provide a well defined roadmap to address the issues faced by the consumer and the utility. Unfortunately, the latest tariff order of the KSERC lacks such a perspective," Mr. Alexander said.

‘Utility must realise dues’
It’s not that the Kerala State Electricity Regulatory Comm-ission (KSERC) has been unmindful of the mounting arrears of KSEB Ltd. In fact, it considered the issue in detail earlier and issued a detailed guideline for  the early realisation of dues. However, nothing has happened, and the commission has allowed the utility to go scot-free despite its failure in getting their money from the defaulting customers.  

From a report of the commission: Accounting system of (KSEBL) follows the accrual system. Accordingly, as soon as the licensee raise an invoice to the consumers for the electricity charges payable the amount due from the consumer is accounted as revenue receipts of the licensee, irrespective of whether the consumer remits the electricity charges or not as per the invoice in time. Consequently, it is the responsibility of the KSEB Ltd to collect the arrears in a timely manner from the consumers, since the same is already accounted for as its revenue receipt.

However, the arrears of electricity charges have been mounting by the year.

In order to improve its financial position, ensure adequate cash flow and to avoid liquidity problems, the licensee has to collect the electricity dues from the consumers, when due and within the time specified by the Commission through the regulations. Some of the consumers of KSEB Ltd, during the public hearing of the tariff petitions argued that if KSEB Ltd collects the electricity dues from the defaulting consumers in a timely manner, the revenue gap and resulting tariff revisions can be avoided.

After considering the importance of the issue in detail, the Commission hereby directs the following course of action by KSEB Ltd, for immediate compliance. KSEB Ltd shall report the progress on a quarterly basis to the Commission:

• The category wise details of the arrears including the age wise details.
• The details of the arrears held up due to court cases.
• The amounts and age wise details of the arrears due from State Government department, PSUs, private consumers etc.
• Proposed actions by KSEB Ltd to recover the arrears in a time bound manner.