Kolkata to pay more for power while Mamata keeps Bengal in check

RP Sanjiv Goenka group's CESC that proposes steep hike in power tariff supplies power to 2.6 mn customers in Kokata and adjacent areas

The RP-Sanjiv Goenka group flagship, CESC, may have sought a steep 18% hike in tariff for the fiscal 2014-15, but state-run utility, the West Bengal State Electricity Distribution (WBSEDCL) is in a bind to reduce tariff.

Last week, West Bengal Chief Minister, Mamata Banerjee, said in the legislative assembly that power tariffs were set to come down. While the RP-Sanjiv Goenka company supplies power to 2.6 million customers in Kolkata and adjacent areas, WBSEDCL supplies power in the rest of the state to about 13.3 million customers.

Incidentally, the West Bengal government has allowed the state-run power distribution company to hike charges by about 26% over the last one year in five instalments taking the average tariff to Rs 6.

Officials suggested that the discom had planned another increase in tariff, as the CESC tariff was still higher by Rs 10 paisa.  However, while CESC has asked the state power regulator for a steep18% hike in tariff for the fiscal 2014-15 mainly to tide over higher coal costs as well as inflationary pressure on its other input costs, Mamata has directed WBSEDCL to bring down the tariff by five to 10paise per unit.

Political observers felt that apart from the upcoming Lok Sabha poll, the AAP-government's decision to reduce power tariff in Delhi may have influenced the Mamata Banerjee-government to take the step.

“The state government is the promoter, we have to abide by that, whether we like it or not,” an official said. However,another official pointed out Mamata's decision was more of symbolism, as the TMC government had earlier allowed the discom to hike tariff as many as five times in the last two and half years.

The tariff hikes have helped WBSEDCL to register a profit of Rs 333 crore in 2012-13. “In the power sector at least, the Chief Minister has shown a change in approach by allowing five hikes. Now, if there is a five paisa cut in tariff ahead of polls, I think, it is more of a symbolism which is not unexpected. Moreover, the discom can afford this,” said the official.

Banerjee claimed, the cut in tariff by the  discom would be on the basis of savings on account of efficient management, although the discom officials did not share any details on that.