Regulatory Commission rejects KSEB plea for tariff hike
Our Bureau

Thiruvananthapuram, May 19

The Kerala State Electricity Regulatory Commission (KSERC) has assessed that there was no ground for hiking power tariff any time now in the State.

The KSERC made known its position while disposing of a petition by the Kerala State Electricity Board (KSEB), seeking permission to the contrary based on what the former found were incorrect assessment of power utility's own finances.

WRONG GROUND

The ground for a possible hike in tariff was sought to be made on the basis of the income-expenditure affidavit that the KSEB had prepared for the financial year and presented to the commission for its consideration.

The KSEB had indicated a revenue deficit of Rs 2,219.60 crore for 2010-11. Such massive deficit would have necessitated an upward revision in the tariff of at least 45 per cent, it had argued.

But the KSERC found that the revenue deficit projected by the KSEB was not ‘realistic.'

After examining available records and hearing from stakeholders, it concluded that the deficit would amount to no more than Rs 457.47 crore.

Similarly, income indicated by the KSEB in its affidavit was to the tune of Rs 5,284.38 crore.

The KSERC found that this would go up by at least Rs 190 crore thanks to incremental revenue from the fuel surcharge imposed in recent times.

PLEA REJECTED

Based on these assessments, it rejected the power utility's plea for an increase in power tariff during the current financial year and directed it to maintain the status quo ante.

Separately, the commission expressed the view that the KSEB should rather purchase energy from the open market through competitive bidding than rely too much on liquid fuel stations to contract comparably expensive energy.

Surplus revenue

The commission went on to assess a surplus revenue of Rs 1,035.85 crore for the KSEB in 2006-07; a deficit of Rs 153.94 crore was presumed for 2009-10 and Rs 73.87 crore for 2003-04 and 2004-05.

Even netting all these, and taking into consideration the currently assessed deficit of Rs 457.47 crore, the commission found that the KSEB would find a surplus of Rs 350.57 crore.

ELECTRICITY DUTY

The commission also noted that the utility had collected a sum of more than Rs 1,000 crore in electricity duty since 2005-06, but had failed to hand over the money to the State government.

This was not indicated in the income statement.

The commission regretted that it could hardly find any ‘method' in the way the KSEB has maintained its accounts relating to expenditure either.

The expenditure shown for the financial year 2010-11 was Rs 7,503.98 crore.

This would very well have been contained to Rs 5,931.85 crore through better management of finances, the commission said.

The commission also refused to recognise the debit of Rs 286.99 crore in the accounts payable as ‘ return on equity' based on an assessment by the Comptroller and Auditor-General (CAG) that the KSEB had hardly any equity to show in its accounts.

But the CAG has allowed a token expenditure of Rs 100 crore in this context.

‘Return' would be recognized if the Board was able to realistically put an amount to equity, if at all, the CAG had said.