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Business News/ Industry / Energy/  CERC suggested to hold public hearing on tariff issues

Mumbai: Prayas, an energy policy-related research organization and authorized consumer representative of the Central Electricity Regulatory Commission (CERC), has suggested that the central power regulator should hold a public hearing before deciding the final tariff for the Tata Power Co. Ltd’s and Adani Power Ltd’s power projects.

The companies have 4,000 MW power projects at Mundra in Gujarat. The Electricity Act, 2003, allows central and state-level regulators to appoint organizations or individuals as authorized consumer representatives to give consumers a say in the tariff determination process.

“According to newspaper reports, the committee under Deepak Parekh appointed by the commission to go into the issue of tariff revision for Tata Power and Adani Power has submitted its report to the commission nearly eight days back, and despite being authorized consumer representatives, we have so far not received the copy of the report," said a 23 August letter sent by Prayas to CERC. “Before the commission takes any final decision on the issue, we and other consumer representatives should be allowed to present their views on the tariff revision issue."

Pune-based Prayas claimed the tariff hike of 45-55 will impose a 1,250-1450 crore annual burden on state government-owned distribution companies that purchase power from the Mundra project, which will get passed on to consumers.

“The presence of independent bankers and financial analysts can hardly be considered as adequate representation of interests of this most-affected stakeholder—the consumer. Therefore, consulting consumers regarding the committee report and its findings becomes imperative,’’ Prayas said in its letter.

When contacted, a Tata Power’s spokeswoman declined to comment on the letter. An email sent to Adani Power’s external spokesman remained unanswered.

In September 2011, the Indonesian government changed the pricing formula for coal exported from that country and linked the prices of coal to the spot prices on international indices which made long-term contracts made by the Indian power producers such as Tata Power, Adani Power, Reliance Power Ltd and Essar Power Ltd among others with Indonesian miners null and void.

In July 2012, Tata Power and Adnani Power had filed a petition seeking a tariff revision. In an April ruling, CERC accepted the need for a tariff revision and appointed a committee under the chairmanship of Deepak Parekh to suggest a formula to revise tariff for both the companies.

On 20 August, PTI reported that the Parekh committee submitted its report on 16 August to the central regulator.

“If CERC decides to accept Prayas’s plea, it will delay tariff revision by few months but I believe CERC should allow Prayas and other consumer groups to present their say for the sake of transparency. It will also help in avoiding further litigation on the issue," said the head of energy practice at a consulting firm. The person declined to be identified.

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Updated: 27 Aug 2013, 01:09 AM IST
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