New tariff on cards: Bucks stop at people

Even the losses owing to fire or accidents would be recovered from consumers,say the draft rules.

The new regulations would be in force for the next five years (March 31,2016) and it would be the basis for annual power tariff revision.

The arguments forwarded under the draft rules for recovering such losses through hike in power tariff is that these factors are beyond the control of power utilities.

Though the tariff will be determined on the basis of the aggregate revenue requirement (ARR) of the company and expected revenue return from tariff and other charges,the power distribution companies have been allowed to make a profit of at least 14 per cent on the total ARR,including interest on loans,security deposits and working capital as also any variation in the prices of fuel these power generating companies use.

On the flip side,if the company earns a profit over 14 per cent,it will have to share one-third of it with consumers in form of rebate in tariffs,say the draft rules.

Similarly,in case of losses suffered by the company due to controllable factors,one-third of it will be passed on to the consumers in shape of a hike in tariff over a period till the loss is recovered.

The company will bear the balance amount of loss.