Tribunal order to slash power tariffs

The reign of mercenary power traders buying cheap power from surplus states and selling it at high prices in deficit states is set to end with the latest judgement of the Appellate Tribunal for Electricity.

In a move which spells lowering of electricity bills for residents of deficit states, the tribunal today decided that if a trader buys power at Re 1 per unit, it cannot be sold for more than Re 1.04 a unit. At present, traders sell power at four times the original price.

"Traders cannot sell power to distribution companies at a price which is more than 4 per cent of the base price, that is, the cost fixed by power generating companies, as per the order," sources informed.

The order came in response to a petition filed by Gajendra Haldea, an adviser in the Planning Commission.

The tribunal also directed various state electricity regulatory commissions (SERC) to fix intra-state trading margins within four weeks. Trading margins on inter-state sales are already capped at 4 paisa per unit by the Central Electricity Regulatory Commission.

Traders have been intermediating between two government entities to raise the price of electricity multifold.

"In case of a crisis, if this kind of bogus trading is allowed, prices will sky-rocket. It is unethical, and against the concept of one-India, because the constitution does not permit inter-state barriers to be created," said Haldea.

While the power rates will go down in deficit states, consumers may have to pay higher prices in power surplus states.