Undertaking claims to have incurred heavy losses in the process of buffering consumers from hike in fuel prices for five months; requests permission to restore its depleted treasury by hiking power tariff by 10 per cent
'Tis winter, the season to be jolly. But while citizens are busy with their naive seasonal frolics, the officials at BEST have gone into a huddle, to think of ways to recover their massive losses. And the means they have chosen to bring about their envisioned end is sure to make you break into a sweat, the nippy winter winds notwithstanding. The powers-that-be at BEST are now hatching plans to extract their losses from their own consumers, by levying a 10 per cent hike in tariffs.
According to officials at the undertaking, BEST has been bearing the brunt of escalated coal prices for months now, in its effort to buffer the end-consumer from the hikes. In the process, the claim to have accrued heavy losses. They now want to recover the fuel adjustment charge (FAC) component present in the electricity bills of its 10-lakh odd consumers.
"We were forced to buy power at costlier rates due to the hike in coal prices, as we couldn't pass it on to end-consumers," said a senior BEST official, on condition of anonymity.
Sources said that this hike has been absorbed by the BEST for a period of nearly five months now, starting from September last year. They have now appealed to the Maharashtra Electricity Regu-latory Commission (MERC), asking it for permission to recover this hike in fuel prices, by levying an additional 10 per cent on the tariff charged to consumers.
Those who are likely to be hit hard by this hike are citizens and proprietors with establishments between Colaba and Sion, as the BEST distributes power to these areas within the city limits, which is supplied by Tata. BEST officials claim that although they have had to shell out the difference in coal prices, they can only charge up to 10 per cent of the consumers' tariff. "We have incurred losses of around Rs 300 crore, due to the hike in coal prices," said OP Gupta, general manager, BEST.
Sources in BEST claimed that the inordinate delay in being allowed to recover the skyrocketing coal costs occurred due to fluctuations in the economic market. Recently, the MERC also held a public hearing, in which BEST officials made a presentation explaining why they needed to recover the money they had lost.
Power experts, however, said that the BEST has a perfect scope of adjusting these costs in the calculations for annual revenue requirements. "There is no need for the BEST to charge the cost separately, as they can very well present it as part of the truing exercise (calculation of power tariffs for the coming year) for the next financial year," said a power expert.
What is fuel adjustment charge?
A Fuel Adjustment Charge is a surcharge added to compensate unanticipated increase or decrease in fuel prices.