MESCOM’s Tariff Hike Proposal Discussed

MESCOM’s Tariff Hike Proposal Discussed

16 October 2009

Power consumers have opposed MESCOM’s proposal to hike tariff at a public hearing chaired by K P Pandey, the chairman of the Karnataka Electricity Regulation Commission (KERC), at the deputy commissioner’s office in Mangalore on Thursday.

Satyanarayana Udupa, the convener of the Udupi Power Consumers’ Forum said that there is absolutely no need to hike power tariff because there is an increase in the power production. He said: ‘The cost of production should also reduce according to an increase in power production. Hence, MESCOM need not increase tariff at any cost.”

Mr. Vijayakrishna, the convener of Bharatiya Kisan Santha MESCOM Power Consumers’ Federation (BKSMPCF) in Puttur suggested that, instead of hiking power tariff by 51 paise per unit, MESCOM can implement cost reduction measures. He also said that MESCOM has failed to undertake development and maintenance work in rural areas. He said: “Although transformers are sanctioned to many villages as per record, they have not been installed. Moreover, officials in rural areas do not pay heed to the complaints of villagers.”

Jayaram Alva, the finance advisor of MESCOM, presented an overview of the company and revealed that the company has a revenue deficit of Rs. 417.15 crores for 2009 - 10. The company requires total revenue of Rs. 1,339.60 crores for the current fiscal year; and the estimated revenue from tariff charges is only Rs. 922.45 crores.

Mr. Alva said: “The development process requires breathing of sufficient financial resources. The only financial resource for the company is the tariff charged to the consumers and the subsidy support of the government. Since the government has agreed to release subsidy support of Rs. 166 crores, the rest of the deficit should be filled up through tariff increase.”