Peoples’ Protest against Power Tariff Hike In Bengal

May 22, 2015

3 2 1

OPPOSE THE POWER TARIFF HIKE IN WEST BENGAL

The protest was held on 20th May, 2015, near the CESC office in Kolkata. The following is the background note.

Friends,

Through the tariff orders issued on March 4, 2015 the West Bengal Electricity Regulatory Commission (WBERC) has permitted the power distribution companies, CESC and WBSEDCL, to increase power tariffs in 2014-15 for all categories of consumers: domestic users in urban and rural areas, commercial and industrial users, irrigation pumping for agriculture and others. The enhanced rates are effective from April 2014, which implies that arrears for the year 2014-15 are to be collected from the consumers alongside the enhanced rates, from March 2015 onwards. This tariff hike has been effected without any proper performance evaluation of the CESC and WBSEDCL by the WBERC. Neither was there any verification done of whether the cost increases cited by the power companies were controllable, nor was any transparent public consultation with the power consumers initiated.

The CESC is the sole power distribution company in Kolkata, Howrah and adjoining areas catering to 29 lakh consumers. The state owned WBSEDCL supplies power to nearly 1.5 crore consumers across the state. We note with grave concern that despite this decision adversely affecting such a large number of people in the state, the state government, opposition parties and the mainstream media are maintaining silence over the issue. We, as citizens of West Bengal, feel that this power tariff hike is unjustified and is being imposed in an undemocratic manner. Such a move needs to be unitedly opposed.

Extent of Tariff Hike: There is a hike in approved average tariff of 8% for WBSEDCL and 14% for CESC between 2013-14 and 2014-15. Moreover, the CESC has proposed further hikes in average tariff for 2015-16 and 2016-17 by around 3% each year, while WBSEDCL has proposed a further hike of 6% in 2015-16 and 12% in 2016-17. If these tariff hike proposals are allowed by the WBERC, electricity bills for consumers in West Bengal are going to shoot through the roof in the days to come. The tariffs for domestic consumers have been hiked at rates much higher than that of the hike in average tariff – the hike is the sharpest for the BPL category, 25% for CESC and 15% for WBSEDCL. The inflation rate in 2014-15 was around 7% for wholesale prices (WPI) and 5% for consumer prices (CPI). The power tariff hike is thus much higher than the average inflation rates.

Power Tariffs Highest in Bengal: Even before the latest tariff hike was approved by the WBERC, the tariff rates in Bengal were among the highest in the country. The WBSEDCL and CESC charged 541 and 495 paisa per unit respectively for 100 units of monthly consumption from urban domestic consumers in 2013-14. All power distribution companies, both in the public and private sectors (other than Reliance Energy), were supplying power below 450 paisa per unit in cities like Delhi, Mumbai, Bangalore, Hyderabad, Ahmedabad and Chennai. Why should the cost of generating and distributing power in West Bengal be the highest among all Indian states?

Failures of WBERC: The functioning of the WBERC has been totally disappointing. Currently two posts of the three stipulated fulltime members of the Commission, including that of the Chairperson, are lying vacant. The latest tariff orders for CESC and WBSEDCL are signed by a lone member of the WBERC. There are no representatives of consumers in the WBERC. The electricity regulatory commissions (ERCs) of states like Maharashtra, Odisha, Andhra Pradesh, Karnataka and Madhya Pradesh have appointed consumer representatives to the ERCs to represent public and consumer interests. ERCs in states like Maharashtra, Bihar, Tamil Nadu, Delhi and Andhra Pradesh conduct public hearings in multiple locations to discuss tariff determination and other issues related to power supply. The WBERC, however, conducts no such public hearings and the process of tariff determination remains opaque for the general public.

CESC’s Monopoly in Kolkata: The absolute monopoly in power distribution enjoyed by the CESC in 567 sq.kms area in Kolkata, Howrah and neighbouring districts has enabled the private company to reap huge profits year after year, rising to over Rs. 650 last year. 85% of the total net profits of the RP – Sanjiv Goenka Group of companies comprise of CESC’s profits alone. Because of the certainty of cost recovery from consumers, owing to the almost rubber-stamp status of the WBERC, the CESC has not been exercising due diligence to ensure managerial and operative efficiency. In order to address the problem of high power tariff in the long term, it is necessary to break the monopoly of the CESC in Kolkata and adjoining areas.

Oppose Electricity Amendment Bill 2014: The central government has introduced the Electricity Amendment Bill in the Loksabha in December 2014, which is now under the consideration of the parliamentary standing committee on energy. This bill seeks to further amend the Electricity Act, 2003 and introduce multiple “supply licensees”, mostly private operators, to supply electricity to the consumers in the same area. Thus, a further layer of profit-making power supply business will get introduced between the power distribution companies and consumers, which will inevitably lead to further hikes in power tariffs. Such apprehension has gained further ground with a provision of the Bill stating that: “the charges fixed by a supply licensee shall be market determined: Provided that the Appropriate Commission shall determine a ceiling charge based on the normative costs and standards of performance…”. Already the state governments of Tamil Nadu, Madhya Pradesh, Odisha and Gujarat have raised objections to the provisions of the Electricity Amendment Bill 2014. We appeal to all stakeholders in West Bengal to oppose the ill-conceived Electricity Amendment Bill 2014 introduced by the central government and press for pro-people amendments to the Electricity Act, 2003 to make the ERCs more effective, transparent and accountable to the people.

Our Demands: We, the undersigned citizens and power consumers of West Bengal are placing the following demands before the state government, the WBERC and the power distribution companies for their consideration.

We Demand:

Ø Withdrawal of the latest hike in power tariffs

Ø Re-initiation of the process of Tariff Determination by WBERC and Reduction of Power Tariffs in Kolkata and West Bengal

Ø Restructuring of the WBERC and making the participation of consumer representatives and public hearings mandatory in decisions on tariff revisions

Ø Breaking the monopoly of the CESC in power distribution to Kolkata, Howrah and adjoining areas

Ø Making pro-people amendments to the Electricity Act 2003 to strengthen the ERCs, make them transparent and accountable; Withdrawal of the anti-people Electricity Amendment Bill 2014 which paves the way for more privatization

We appeal to the people of West Bengal to support these demands and unite in a movement to oppose the anti-people moves in the power sector.

Sd/-

Agniswar Chakraborty, Alpana Dutta, Amartya Roy, Amitabha Bhattacharya, Anindya Sarkar, Avash Munshi, Biswajit Hajra, Deborshi Chakraborty, Gargi Adhikari, Jayati Pal, Prasenjit Bose, Prasun Banerjee, Ratul Banerjee, Rik Chattopadhyay, Subhanil Chowdhury, Tanweer Ahmed Khan, Zico Dasgupta