8.4       HT Tariffs

8.4.1        Railway Traction

8.4.1.1 The Central and Western Railways submitted their written objections to the tariff revision proposed by Board. They were also given opportunity to present their views in the public hearing by the Commission. They emphasised that electricity tariff for the Railway Traction will be the highest in the country if Board’s proposals are accepted. Madhya Pradesh has a vast railway traction network depending on electricity and any increase in electricity tariff will imply substantial additional expenditure for the Railways. The tariff should not be higher than the cost of alternative sources of power. They also wanted relaxation in the terms and conditions of supply, such as minimum load factor, payment of supply affording charges for enhancement of contract demand, etc.

  8.4.1.2 The Board has submitted that Railway tariff has not been revised since July 1996 while there has been general inflation of the order of 10% per year during this period. The Railways have also increased their freight charges a number of times during this period. The Board is not in a position to absorb additional expenditure on account of inflation.

  8.4.1.3 Taking into consideration the interest of the Board as well as the Railways, only a modest increase in tariff has been allowed. The condition of minimum 30 percent load factor will be applicable only on contract demand and not on exceeded maximum demand.

  8.4.2    Coal Mines

  8.4.2.1 Western Coal Fields (WCL) and South Eastern Coal Fields (SECL) have represented that the electricity tariff proposed by Board for coal mines is the highest in the country. The tariff proposed for coal mines is also higher than that for cement or steel. It is also, much higher than that charged by NTPC from the Board.

8.4.2.2 The Board has submitted that tariff for coal mines has not been revised since July 1996 and an increase of 50% on account of inflation is justified. The Board has, also, stated that during this period WCL and SECL have increased the prices of coal by 45% and 53% respectively. With the formation of Chattisgarh, the bulk of coal supplies to the Board have to be sourced from WCL whose prices are higher and quality inferior to that available from SECL. These factors have pushed up cost of generation for which Board is to be compensated.

  8.4.2.3 The Commission has tried to strike a balance between the interests of coal companies and the Board in fixing the tariff. No change is proposed in the terms and conditions of supply.

  8.4.3    Cement Factories

  8.4.3.1 MP Cement Manufacturer’s Association has represented that all the cement factories in Madhya Pradesh have incurred losses during the year 1999-2000 and during the quarter ending September 2000. They have specifically objected to determination of fuel cost adjustment (FCA) charges and their clubbing with the tariff, which would result in substantial increase in electricity duty. They have also objected to captive power policy under which an industry installing captive power plant is compelled to draw at least 50% of electrical energy from the Board. They have requested withdrawal of tariff minimum charges and not to allow proposed parallel operation charges.

  8.4.3.2 The Commission is aware of the serious problems faced by industries in Madhya Pradesh as a result of general slow down in the nation’s economy, and international competition due to lowering of tariff barriers and cheaper imports. The Commission has also noted the specific problems being faced by the cement industry and has made only a nominal increase in the existing tariff. The Commission has, also, agreed that FCA charges should be shown separately and should not be merged with the tariff. As the Board has created and is also maintaining generation and T&D facilities for supply of power to cement factories according to their contract demand, it is entitled to levy tariff minimum charges to take care of its fixed cost. There will be no change in tariff minimum charges.

  8.4.4    Mini Steel Plants
  Mini Steel Plants or Mini Steel Plants with Rolling Mills/ Sponge Iron plants in the same premises have been considered under the same tariff category. A nominal increase has been made in energy charges while other conditions of supply including minimum charges will remain unaltered.

  8.4.5    Electro Chemical / Electro Thermal Plants and Ferro Alloy Plants
Some nominal increase in demand and energy charges is allowed, but not in other terms and conditions.

  8.4.6    Two Part Tariff
  Keeping in view the interest of the Board, as well as the industry, only minimum increase has been allowed in the tariff. In case of 132 kV supply, the condition of 40 percent load was resulting in an overall higher tariff as compared to that of 33 kV. The condition of load factor has been reduced to 30 percent by us. 

8.4.7    General Purpose / Grid Tariff
  Although the Board, in its proposal, has clubbed the tariff for the above categories under “other HT consumers”, but on considerations of nature of use, separate grid / general purpose tariff has been retained, which will also be applicable to hospitals.

  8.4.8    Slab Tariff
          The Board in its proposal has also clubbed slab tariff under “other HT consumers”. This tariff is practically required for seasonal consumers where facility of annual minimum charges had been available. Considering the representations and problems of seasonal consumers, separate slab tariff has been retained.

 

8.4.9    Irrigation (at 33 and 11 kV supply)
The existing tariff is the same for 33 kV and 11 kV supply. As the cost of supply is higher at 11 kV, a slightly higher tariff is fixed for 11 kV.

  8.4.10  Border Villages
This is basically an interstate transaction. The existing tariff of 31.37 paise/unit is unrealistically low. The tariff of 250 paise / unit proposed by the Board to cover cost of transmission and distribution, is allowed.

 

8.4.11  Rural Electric Cooperative Societies
 

8.4.11.1 There are 14 RE Cooperative Societies in Madhya Pradesh at present getting power from Board at rates ranging from 3 paise to 12 paise per unit. The Societies sell power to their consumers at the same rate as prevalent in the Board’s area. The tariff for these Societies has not been revised for the past ten years.
 

                    Having regard to the cost of supply and the inability of the Board to sustain the loss due to the abnormally low tariff, the tariff proposed by the Board is accepted.

  9.             TARIFF DETERMINED BY THE COMMISSION

Having regard to all aspects of the proposal of the Madhya Pradesh State Electricity Board, the submissions made by the objectors and the public in general, the analysis of the proposal and the findings thereon, the Commission, in exercise of the powers conferred under section 26 of the Madhya Pradesh Vidyut Sudhar Abhiniyam, 2000, hereby determines the electricity tariffs of the Board for the year 2001-02 as specified in Schedule ‘A’ subject to the Board supplying continuous good power with  other terms and conditions related to tariff as set out in Schedule ‘B’ hereunder: