Friday, November 13, 2009

Public wary of high-cost power

Public wary of high-cost power

FKCCI feels that the electricity regulatory commission should protect the interest of consumers

Senthalir S. Bangalore



Consumers and representatives of various organisations on Thursday requested the Karnataka Electricity Regulatory Commission (KERC) to ensure that they don't face the brunt of high-cost power purchase by electricity supply companies in the state.
The commission was hearing a case that dealt with the rate fixed by the government of Karnataka to purchase power from co-generation companies and biomass plants.
In an order dated January 27, 2009, the government had accorded approval for the electricity supply companies (ESCOMs) to purchase power from the co-generation and biomass plants at the rate of Rs6.50 and Rs5 per unit respectively for a period of five months, from January to May this year, subject to the approval by the commission.
M/S MPPL Renewable Energy private limited, which has a power purchase agreement with M/S Mangalore Electricity Supply Company Ltd had filed a petition before the KERC seeking approval for the power purchase rate fixed by the government. The Escoms in Hubli, Gulbarga and Managalore separately requested the KERC to accord approval for payment of power purchase cost. Only when the counsel appearing for Mangalore Electricity Supply Company (MESCOM) and the government informed the KERC that the government will not bear the difference of cost of power specified in the Power Purchase Agreement (PPA), the commission decided to hear the consumers, stakeholders and others who will be affected by the matter.
The extra expenditure incurred by ESCOMs during January to May 2009 towards the purchase of power from co-generation and biomass plants amounted to Rs202.29 crore, with Bangalore Electricity Supply Company (BESCOM) incurring expenditure of Rs37.74 crore. "It is not fair to pass on the burden of extra expenditure incurred by the companies to the consumers. The companies should have approached the KERC before fixing the rate. The tariff fixed by the government in its order is higher than that mentioned in the PPA," said YV Ashwath Narayan of Consumer Care Society.
Stating that the commission should protect the interest of the consumers, MG Prabhakar, energy committee chairman, Federation of Karnataka Chambers of Commerce and Industries (FKCCI) said that the government had fixed the power purchase cost under Section 11(1) of Electricity Act. However, Section 11 (2) of the act states that the appropriate authority may offset the "adverse financial impact...". The regulation has already been framed.
Sathyanarayana Udupa, secretary of Bharatiya Kisan Sangh, stressed the interest of the farmers and said that the high-cost power should not burden them. Representatives from Laghu Udyog Bharati, Peenya Industries Association, and Consumer Rights Education and Awareness Trust also urged the commission to not burden consumers.

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