CALCUTTA, March 22: CESC Ltd, the RPG power utility, faces the daunting task of recovering over Rs 450 crore from its consumers on account of fuel surcharge for the period -- 1993-94 to 1997-98. This includes fuel surcharge of Rs 123 crore from 1993-94 till 1995-96, according to the report submitted by SR Batliboi & Co Ltd, which is contrary to an earlier report by the DK Bose committee.CESC, which expects the West Bengal government to allow it to recover Rs 123 crore from its consumers for the three years, from 1993-94 to 1995-96, is advertising regularly to show that Calcutta has the cheapest domestic tariff of Rs 1.22 per unit among the metros compared to Rs 1.38 in Mumbai, Rs 1.28 in Chennai and Rs 1.93 in Ahmedabad. A top CESC official had admitted earlier that if the fuel surcharge recovery is allowed, CESC's rate will be costlier by around five to seven paise per unit. He also pointed out that in other metros rates for multi-storeyed buildings are much higher that those for ordinaryconsumers.
Now, with the ruling Left Front's candidates in Calcutta performing poorly in the Lok Sabha elections, and with panchayat elections in the state set for the last week of May, the government is unlikely to touch the fuel surcharge issue now.
In addition to the Rs 123 crore, CESC's annual report for 1996-97 says that the fuel surcharge yet to be billed to consumers for 1996-97 amounts to Rs 190 crore. "Fuel surcharge dues of Rs 258,51,36,560 of which Rs 190,71,07,578 accrued as income under Earnings from sale of Electricity in the current year...."
For the first six months of the current financial year (1997-98), CESC says it has not billed a fuel surcharge of Rs 77 crore, which has been included in the net sales of Rs 760 crore. If a similar amount is to be incurred in the second half to March 31, 1998, the total fuel surcharge for the year could be between Rs 150 crore and Rs 160 crore.
To recover the fuel surcharge of Rs 190 crore for 1996-97 alone, CESC will have to charge an extra 40paise per unit. This is arrived by dividing the total fuel surcharge of Rs 190 crore by the number of units sold (4794 million) during the year. In addition to all this, CESC will have to pay Rs 21.19 crore as revised fuel surcharge to Damodar Valley Corp -- from which it buys power -- as directed by an arbitration panel on May 22 last year.
CESC will have to clear this in monthly instalments of Rs 85 lakh. According to the annual report, the company has applied to the state government for necessary permission to make special appropriation and this will be recovered from its consumers.
The fuel surcharge controversy is based on the dispute between clear profit and reasonable return, which are terms used in the act. The Indian Electricity (Supply) Act of 1910 lays down the amount of profit that a utility can make. If it has charged more, the money has to be returned to the consumers while if it is less the power utility can recover it from the consumers.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
