B.PAC makes data-loaded objections to BESCOM’s tariff hike proposal for FY-18

B.PAC submitted its strong objections to BESCOM proposal for increase of electricity tariff for FY-18. T.V. Mohandas Pai, Vice President, B.PAC made the submissions before the commission today during the public hearing conducted by KERC.

Following are the highlights of B.PAC’s submissions:

Distribution Loss:

All divisions/towns in BESCOM with distribution loss above average 15% should be borne by BESCOM and not to be loaded to the consumer.

Power purchase:

KPCL thermal power supply has reduced significantly to a tune of 2088 MU, BESCOM purchased short term power throughout the year at high price. Rs. 313.4 Cr is the difference amount which should be disallowed in granting tariff to BESCOM. Further BESCOM’s claim to true up Rs.724.9 Crs of purchase variance be summarily rejected.

HT Sales

The consumption pattern for Fiscal Year 15-16 show that in HT category consumption by industrial users has declined by 3.3%, commercial users by 6.47% and others declined by 15.03% showing sensitivity to price rises even when the state GDP has grown at 16% during FY 15-16.

BESCOM has incurred Rs. 347 Crs revenue loss due to reduction in HT during FY – 16 compare to previous years at previous year rates. The commission should not allow any increase to the tariff this year.

Cross subsidy level:

While the National Tariff Policy directs the ESCOM’s to recover 50 % of the total power cost from agriculture, BESCOM data show under LT4a category, level of cross subsidy is 63%. This is against the rule of law. In the case of Agriculture, BESCOM has recovered only 37 % of the cost. The commission should direct BESCOM to recover at least 50 % of the cost.

The cross-subsidy variations of BESCOM are not within the prescribed limits. BESCOM incurred a cost of nearly Rs. 3000 Crs as total cross subsidy this year which should be eliminated while determining the tariff.

Annual Accounts FY 15-16:

Rs. 322.53 Crs claim made by BESCOM as interest on working capital on excessive receivable of Rs.2804.66 Crs should be disallowed by the commission while determining the tariff as it is above 60 days limit allowed by the regulator.

BESCOM is subsidizing other ESCOMs’ and KPTCL out of consumer’s money and claiming Rs. 246.31 Crs as interest on working capital at 11.5 % which should be disallowed as Rs. 2141.88 Crs of BESCOM money is being used interest free by other ESCOM’s and associates

Specific consumption of IP sets:

The commission should disallow Rs. 925.74 Crs excessive consumption by IP set consumers and direct BESCOM to collect the difference amount from Govt. This clearly indicates in the name of farmers an excess of Rs. 925.74 Crs is being robbed. It is obvious that in the name of farmers there is large scale robbery of power and Government is turning a blind eye for various reasons.

Regularization of illegal IP sets should not be considered for any Cross Subsidy or tariff hike to be paid by other consumers. Any regularization of pump sets should be paid for fully by Government and not by the consumers.

Duplicate and multiple IP set per farmer should be removed to avoid subsidy to the rich. To bring in transparency, Direct Benefit Transfer (DBT) to be done to farmer’s bank/shadow accounts and full charges can be debit.

After making submissions T.V. Mohandas Pai, Vice President B.PAC said “We made the submission before the Hon’ble commission giving all the data and urged the regulator to protect the interest of citizens of Bengaluru in an unbiased manner and not the interest of BESCOM while determining the tariff for FY 18.”

Below is the detailed presentation submitted to the commission.

BPAC Submissions to KERC on BESCOM Tariff Revision FY 18 – Feb 20 by Citizen Matters

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