Audit done, Chandigarh electricity department to pay interest on security to consumers

Department owes nearly Rs 15 cr as interest on security collected from consumers; to be credited in April, May bills.

Written by Vinod Kumar , Regional | Published: March 17, 2016 3:56:14 am

THE CHANDIGARH electricity department has decided to pay interest on security collected from consumers. The department owes nearly Rs 15 crore as interest on security collected from consumers.

The interest will be credited in the bills to be generated in April and May. As per norms, bills for domestic customers are generated bi-monthly, while bills of commercial users are generated every month. Domestic consumers are divided into four groups of 50,000 each and pay bills in six cycles a year.

As per the provision of regulation 25 (4) of Tariff Regulations 2009 and in accordance with Clause 47(4) of Electricity Act 2003, the distribution licenses is required to pay interest on security deposit collected from the consumers, equivalent to the bank rate or more as may be specified by the commission.

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The department charge security at the rate of Rs 750 per kilowatt from a consumer while applying for the meter. Depending on the type of connection, consumers have to deposit amounts between Rs 1,000 and Rs 10,000 as security to the department.

Interest to be paid to each consumer will be calculated at the rate of 8.50 per cent. If a consumer paid Rs 10,000 as security, the department will make one-time adjustment of Rs 850 in the bill. UT superintending engineer MP Singh said the department would pay the interest on security amount and have sought approval from JERC for the same. The electricity department caters to 2.12 lakh consumers, of which 1.75 lakh are in the domestic category. Of the total, there is regular billing of around 94 per cent of consumers.

According to sources, the decision of the department to pay interest on security to the consumers will further increase the gap between revenue and expenditure, which at present stands at Rs 1,127.69 crore. The gap has emerged due to non-revision of tariff since 2012. The commission has been turning down the petition filed by the department on grounds grounds of failure of the department to get commercial audits done, which is mandatory.

The department has finally got the commercial audit done. Earlier, accounts of the department were audited along with those of other departments of the Chandigarh administration whereas, as per norms, the department has to get its accounts audited separately. The department in its Aggregate Revenue Requirement (ARR) and tariff petition has proposed a hike of up to 35 per cent in the existing tariff for the next financial year in different slabs under the Multi-Year Tariff (MYT) system which will come into force from April 1. As the revenue gap for previous years is high which require substantial tariff revisions, the department has urged the commission to device a mechanism for recovery.

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