Making a presentation at a national seminar on `Electricity Tariff for the Millennium' organised by IEEE Power Engineers Society (India chapter) at Baroda, L&T general manager (cogen & captive power business group) BM Verma said that captive power generation alone could provide electricity at low cost, especially to power intensive industries like cement, metal and petrochemicals.

With the formation of SERCs (state electricity regulatory commissions), he said the powers for giving clearance under Section 44 of Electricity Supply Act, 1948 should be transferred to SERCs from SEBs, as has been done in Andhra Pradesh. The Section 44 says: ``... Consent shall not be withheldunless the board shows to the applicant that the electricity could be more economically obtained within a reasonable time from another appropriate source...''

He argued that the very purpose of SERCs is to ``attract private sector investment, bring accountibility, increase efficiency ... and to insulate the electricity industry from short-term political decision and rigid bureaucratic control.''

Quoting different sources, Verma said, the average electricity tariff for industrial consumption in India was the highest at Rs 4.00 per kwh as against Canada Rs 1.70, Sweden Rs 1.80, UK Rs 2.30, the US Rs 2.80 and France Rs 3.00. It was far higher than that in developing countries like Thailand Rs 0.80, Indonesia Rs 1.00, South Africa Rs 1.60, the Philippines Rs 2.00 and Malaysia Rs 2.20.

He pointed out that regional variation in electricity tariff as well as in electricity duty (ED) could result in flight of industry from states with higher tariff/duty, notwithstanding the fact that ED fetch revenue forrespective State governments. The average electricity duty per kwh (and revenue within brackets) in select states are: Gujarat 73 Paise (Rs 564 cr), Madhya Pradesh 28 Paise (Rs 311 cr), Maharashtra 15 Paise (Rs 245 cr) and Rajasthan Rs 10 Paise (Rs 245 cr)

Speaking on the occasion, Gujarat Electricity Regulatory Commission (GERC) chairman Justice (retired) DG Karia found scope for improving the efficiency of SEBs too. An amedment in Electricity Act in 1978 stipulates that SEBs should earn at least 3 per cent return (after interest and depreciation) on a historical cost-asset base. But, in reality, they have been treated as promotional agencies with littlecontrol over tariff policies and were never required to generate any rate of return. The actual tariffs levied by SEBs have been at variance with broad principles of rational pricing policy.

Justice Karia defended some form of subsidy for weaker sections of the society, including farmers, as has been vogue in the most developed nations. But, it should beextended in an open manner based on certain well acceprted principles. It is very crucial at what price the multi-purpose energy is available for different sectors of the economy. At the same time, he said, the lower tariff often proved counter-productive as it often led to waste of energy.