With reference to "A questionable principle" (January 15), the analysis of the Central Electricity Regulatory Commission's (CERC) decision on applicability of "change in law" is most timely. In most cases, over-exuberance, the lure of tax-free income and the glitter of obtaining big coal mining rights made the promoters place unsustainable bids.
It remains to be seen if the consumers also agree to this decision to enable Reliance Power to charge more. The fundamental difference between an auction-determined pricing and one that is subject to the central or state regulatory commission is the applicability or otherwise of the pass-through mechanism. Before a cost pass-through is admitted in cases like Sasan, CERC should have settled the principle of equity - that is, if there is a "change of law" that reduces cost, the same also must be passed through to the consumers.
It is, however, most unlikely that any power producer will go on his own to CERC with a request to cut the tariff. Either CERC should then move quickly on its own or also allow the end consumers, and not merely the discoms, to approach it on such matters.
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It remains to be seen if the consumers also agree to this decision to enable Reliance Power to charge more. The fundamental difference between an auction-determined pricing and one that is subject to the central or state regulatory commission is the applicability or otherwise of the pass-through mechanism. Before a cost pass-through is admitted in cases like Sasan, CERC should have settled the principle of equity - that is, if there is a "change of law" that reduces cost, the same also must be passed through to the consumers.
It is, however, most unlikely that any power producer will go on his own to CERC with a request to cut the tariff. Either CERC should then move quickly on its own or also allow the end consumers, and not merely the discoms, to approach it on such matters.
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P Datta, Kolkata
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number