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Escoms need to perform first before seeking tariff hike

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If Bangalore Electricity Supply Company (Bescom) wants to hike the power tariff, you have the right to question its performance. As per law, the inefficiencies of the electricity supply companies (Escoms) cannot become a burden on consumers. Multi-Year Tariff Regulations (Terms and Conditions for Determination of Tariff for Distribution and Retail Sale of Electricity, Regulations, 2006) mandates that all Escoms submit their annual performance review that details the amount of tariff collected, purchase of power and balances, among other things.

“The tariff petition seeking a hike should be based on the annual performance review. When none of the Escoms explain their accounts in their annual performance review which has to form the basis for seeking a hike, how can they ask for a hike? The KERC had also questioned this in their preliminary observation,” said advocate Sridhar Prabhu.
“The inefficiencies of the distribution companies would not be allowed to pass on to the consumers. The performance-based tariffs would make various entities in the power sector more efficient to work on commercial lines and earn profits, which would attract investment in the power sector to make the state self-sufficient in power,” it says.

For the full report in the ToI, click here.

The above report comes in the wake of the electricity supply companies (Escoms) seeking a uniform increase of 75 paise per unit (as per this ToI report).

In this context, the further questions that arise are

1) Why isn't the BESCOM Citizen Charter accessible on the net? Has one been drawn up, in the first place?
2) Apart from performance reviews, which are essentially post mortems, why is BESCOM not looking at process standardisation, like through ISO certification, etc?
3) Would it like to look at some form of 'citizen participation' in the monitoring of its operations, perhaps through PRAJA?

The challenges before BESCOM, as one understands, are

1) clear segregation of urban (profitable) and rural loads (subsidised), to facilitate proper measurements of the quantums involved.
2) for rural loads, further segregation of agricultural (free supply) and non-agricultural (subsidised) loads.
3) delayed release of subsidy payments from the government.
4) reduction of theft in urban areas, particularly by politically connected mafioso.

Now, if BEST (Mumbai municipality owned utility) can manage its services efficiently even in a demanding market like South Mumbai, with its citizens not having to depend on gensets, inverters, converters, etc, the question that needs to be asked is why can't BESCOM?

Part of the answer of course lies in BESCOM's rural 'burden'. Can it then have different yardsticks for the two types of loads? Or, does the answer lie in 'privatisation', more specifically of urban distribution, quite as envisaged by the government itself?

Muralidhar Rao


murali772's picture

way to go, Sir!

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In order to improve the quality of the functioning of Bescom, the managing director said they were planning to go for Total Quality Management (TQM) and ISO 9000 by November 1, 2011. "We recognize the need for improving the overall quality of Bescom. We are going to implement TQM and secure an ISO 9000 by November 1, 2011," he said.

PARTICIPATORY COUNCIL: In order to improve the quality of Bescom and make it sustainable, the company is planning to solicit the opinions of consumers and make the stakeholders part of the decision-making process. Manivannan said: "We will include stakeholders in our advisory panel, called participatory council. We will involve major decision-making through people's consent. We will keep their opinions confidential and transparency will be maintained."

On vigilance and theft, he said Bescom will undertake survey involving the public. Local customer committees will be formed to assist in finding power theft. Bescom has set a target to improve reliability index by five per cent by April 15, 2011 and 10 per cent by November 1, 2011.

For the full text of the report in the ToI, click here

Well, can we hope for the same quality of power that Mumbai enjoys, and junk all our gensets, say in three years' time? The approach is right, and with the right kind of backing from the government, it can very well happen.

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