Power managers in Tamil Nadu are paying nearly 70% of revenue collection to private electricity generation companies for procuring just 20% of electricity consumed in the state, Communist Party of India (Marxist) has told Madras high court.
Assailing the December 1 power tariff hike and demanding its immediate stay, the party filed a PIL in the court saying Tamil Nadu Electricity Regulatory Commission (TNERC) had failed to examine the exorbitant rate at which electricity was purchased from private producers, and other such issues before okaying increase in tariff rate to mop up a revenue of 5,225 crore from consumers.
In the petition, party's state secretary G Ramakrishnan pointed out that while the cost of TNEB-produced power is 2.4 per unit, it purchased from private parties at the rate of approximately 12 per unit. From the central pool it purchases power at 3.5 per unit, he said.
Instead of examining actual reasons for the revenue gap, and the measures to reduce it, the TNERC said: "The commission did not examine the high procurement rate from private parties, theft of electricity and recovery of dues from industrialists while fixing the revised tariff. The regulatory body is duty-bound to go into the fairness of the rates."
The first bench comprising Chief Justice Sanjay Kishan Kaul and Justice M M Sundresh adjourned the case to Monday for further hearing.
Charging the commission with abdicating its responsibility to regulate purchase and procurement process of distribution licences including the price at which electricity is procured, Ramakrishnan said that the commission mechanically agreed for upward tariff revision for consumers with effect from December 12, 2014.
As per rule, TANGEDCO ought to have filed an application for determination of tariff by submitting all the relevant particulars to the commission, it said, adding no such procedure was followed this time around.
"They have mechanically agreed with TANGEDCO's comments without verifying records, inquiring about non-utilization of generation points to their maximum capacity, pitfalls in their action in resorting to procure electricity from private parties for exorbitant rates for certain obvious consideration," the PIL said.
Most of the 1,154mw power shortfall was purchased only from seven private electricity generating companies, it said, adding: "TANGEDCO has not taken any measures for optimizing their generation, as certain vested interests would be benefited by purchasing power through private parties.
"For the benefit of a few vested interests, 2.65 crore consumers are being taken for a ride. TNERC remained a mute spectator, and encouraged TANGEDO by permitting them to hike the tariff."
The party also criticized the manner in which the mandatory public hearings were held prior to the tariff hike announcement. A farce of a hearing was held by the commission in Chennai, Trichy and Erode, it said, adding that it was not held at other district headquarters.