A day after the Supreme Court refused to grant a stay on the Calcutta High Court regarding its ruling that the Central Electricity Regulatory Commission (CERC) cannot fix provisional tariffs, based on a case filed by a few consumers’ of Damodar Valley Corporation (DVC), the regulator today said that this will not affect its right to fix provisional tariffs outside West Bengal.
“The court ruling was specific to DVC and West Bengal. Hence, we still have the right to fix provisional tariff across the country. The court has asked to fix the final tariff for DVC consumers with in two months,” said CERC Chairman Pramod Deo. There were reports that the court ruling will impact power generators like NTPC and NHPC too, apart from DVC.
Because of the ruling, DVC will have to go back to its older rate, till final tariff is fixed. “The apex court has made it clear that this is case specific to those 46 DVC consumers, who approached the court. Otherwise, CERC can fix provisional tariff across the country,” said R N Sen, chairman, DVC.
The company sources said that because of non-payment of provisional tariff by consumers due to the legal tangle, it was having a revenue loss of about Rs 30 crore per month. “We are waiting for a settlement on this since 2009. Now that the court has directed it, will wait for another 2 months,” Sen added. When contacted, a top official from power major NTPC said that the legal battle will have no impact on it, as it follows power purchase agreement model.
Normally, the regulator fixes final tariff for a period of five years, while provisional tariff is a mid-term arrangement. According to Ashok Khurana, director general of the Association of power producers, rather than going for provisional tariff, which would be on a higher range, the regulator should look to fix unit-wise tariff, as it may be more consumer friendly. “When a new power plant starts operation, the final tariff is fixed only after the entire project is operational. Hence, provisional tariff is bound to be on a higher range as it may be for supplying of power from one or two units,” Khurana added.
The issue kicked off after some consumers’ under the DVC moved to the Jharkhand High Court, raising objected against a CERC provisional tariff order. According to reports, a Jharkhand High Court division bench ruling led the case before the Supreme Court and also the Calcutta High Court. On which, the Calcutta High Court ruled that the regulator cannot fix provisional tariffs.