5.0

SOUTHCO’S REPLY TO THE OBJECTIONS

5.1

The Managing Director of SOUTHCO replied to the various issues raised by the objectors.

5.1.1

In its rejoinder to the above objections SOUTHCO stated that the Retail Tariff application submitted by SOUTHCO to OERC is well within the provisions of OER Act and Sixth Schedule of the Electricity Supply Act, 1948. The Distribution and Retail Supply License also requires the Licensee to submit its revenue requirement for the ensuing financial year to OERC. SOUTHCO have submitted the Revenue Requirement for 2000-01 and have requested an adjustment in tariff to meet the revenue requirement. This is in accordance with the Regulatory Frame Work prevailing in the State of Orissa.

5.2

Need for increase in energy charges

5.2.1

The proposed increase in tariff is based on a reasonably accurate estimate of the revenue requirement of 2000-01. Audited accounts for the financial year 1999-00 have been made available to the commission. The projections given by SOUTHCO in it’s retail tariff application are in line with the audited results for 1999-00. Since the proposed tariff would be applicable for only part of the year, SOUTHCO will have a huge deficit for the year 2000-01.

5.2.2

In order to ensure the viability of the power sector in the state of Orissa, it is necessary to balance the interest of the licensee and at the same time protect the consumers from a steep increase in tariff. The proposal submitted by SOUTHCO has attempted to do the same.

5.2.3

A large number of LT consumers, however, continue to pay tariffs significantly lower than their cost of supply. The process of cross-subsidisation has to be gradually dispensed with due to socio-economic reasons. OERC has recognised the need to bring the tariffs for all consumer categories to their respective costs of supply. In order to avoid sharp increases in tariffs, the OERC has recognised that this process would be completed over time, and that cross subsidies would continue to exist till such time.

5.2.4

The increases in energy charges asked for in our tariff proposal for various categories of consumers is commensurate with the revenue requirement of SOUTHCO.

5.3

Loss Reduction

SOUTHCO is committed to reduce distribution losses and provide improved quality of services. SOUTHCO has already embarked on a comprehensive metering plan and system improvement schemes to curb distribution losses and improve the performance, the progress of which is reported to OERC. However, the benefit of all the above would accrue only over a period of time. The distribution loss during the financial year 2000-01 targeted to a level of 38% is a stiff target and forms a reasonable basis for the tariff proposal.

5.4

Consumer Services

SOUTHCO is making sincere efforts for improving consumer services and redressal of consumer grievances through its existing departmental network and system. In this connection, efforts have been made to form village committees and hold Bijli Adalats and for improvement of supply conditions as well as providing proper metering for the benefit and satisfaction of the consumers.

5.5

General

5.5.1

SOUTHCO would also like to clarify as under :

5.5.2

The objections raised in different paragraphs that proposed increase in various categories is exorbitant is not correct. The application submitted by SOUTHCO explains the said facts.

5.5.3

SOUTHCO’s application has been submitted basing on the present BST tariff and the question of resorting to high cost power does not arise.

5.5.4

The matter relating to improvement in supply conditions is to be considered separately from the tariff application.

5.5.5

Emphasis is being given for installation of good quality meters with extended guarantee period. SOUTHCO has, however not proposed any increase in existing meter rent provisions which are quite reasonable.

5.5.6

The energy bills are being prepared and delivered as per regulations and applicable tariff and no license conditions are being violated.