Bhopal: Discoms in the state have incurred losses amounting to Rs 25,000 crore in the past four years. Now, they have urged the Madhya Pradesh Electricity Regulatory Commission (MPERC) to admit the losses and allow the amount to be recovered from the consumers.
If the regulator gives the assent for the entire amount, it will lead to an increase of at least Rs 5 per unit and even if half of it is allowed by the MPERC, it will make the power dearer by at least Rs 2 per unit. In simple words, if the MPERC allows 100% of these losses to be recovered from the consumers, then anyone who uses two ACs (5-star), a couple of fans, an LED TV and five LED bulbs, or consumes about 425 units per month, will have to pay at least Rs 2,000 extra per month.
If 50% of the losses are allowed, then the same consumer will have to pay at least Rs 1,000 extra per month.
As per norms, power tariff is decided by the commission on the basis of estimated income and loss by the discoms; it is done before the start of the financial year.
Subsequently, when audited reports of actual expenditure incurred by the discoms are received in the next financial year, they file ‘true up’ petitions, urging the commission to allow them to recover actual losses of the previous year through increased tariff for the next year.
In Madhya Pradesh, discoms did not file true up petitions in time for the years 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18. Petition for year 2013-14 was filed last year and due to the delay, the regulator only allowed around Rs 4,000 crore to be recovered.
The remaining four true up petitions for years 2014-15, 2015-16, 2016-17 and 2017-18 have been filed recently, after several years of losses. Discoms have informed that for years 2014-15, 2015-16, 2016-17 and 2017-18, they have incurred losses to the tune of Rs 5,156.88 crore, Rs 7,156.94 crore, Rs 7,247.55 crore and Rs 5,327.54 crore, respectively.
Experts state that these true up petitions should not be allowed by the regulator as there is an APTEL (Appellate Tribunal for Electricity) order of November 11, 2011, wherein it had said, ‘In the event of delay in filing of the ARR, truing up and Annual Performance Review — one month beyond the scheduled date of submission of the petition, the state commission must initiate suo-moto proceedings for tariff determination in accordance with Section 64 of the Act read with clause 8.1 (7) of the Tariff Policy.”
APTEL has a superintending role over regulators to issue orders, instructions or directions as it may deem fit, to any state or central electricity regulatory commission for performance of its statutory functions, under the Electricity Act, 2003.
“First of all, these true up petitions should not be allowed by the regulator as APTEL had clearly said in its order that filing of these petition is a time-bound thing. Secondly, MPERC in its order against the true up petition for 2013-14 had said that due to delay, it is not allowing carrying costs. In case of these petitions, the carrying costs would be thousands of crores, which will be borne by the government or the public exchequer. Now, who is responsible for these losses? It is the board of directors of the discoms, as this loss to the government would be due to the delay in filing petition. Thus, action should be taken against them,” said Bhopal-based expert on energy, MC Bansal. Bansal had also complained about this issue to the ministry of corporate affairs. Allowing losses for the past years to be recovered from current consumers is like making the present generation pay for losses incurred by their ancestors, said Rajendra Agarwal, retired additional chief engineer of MP power generating company.
“Even if half of the losses are recovered from the consumers, power costs would escalate by at least Rs 2 per unit,” said Agarwal and added, “On an average, around 5,000 crore units of energy are sold in the state annually.”
“Even if only Rs 10,000 crore is allowed to be recovered from the consumers, it will come to around Rs 2 per unit. Thus in the light of the APTEL order and public interest, the regulator should not allow these losses to be recovered from the public.”