Announce FSA Annual Calender immediately, Reject outdated FSA claims - Lok Satta tells APERC

The Lok Satta Party today requested the Andhra Pradesh Electricity Regulatory Commission (APERC) not to consider power distribution companies’ (Discoms) proposals for Fuel Surcharge Adjustment (FSA) for the four quarters of FY 2010-11 and three quarters of 2011-12.

“The inordinate and unjustified delay in determining the FSA violates natural justice principles”, said the Lok Satta Party in a representation to the APERC.

Mr. M. Satyanarayana, President, Mr. N. Ravinder, Secretary, and Mr. A. Rama Rao, Joint Secretary of the party’s Greater Hyderabad Municipal Corporation unit, Mrs. S. V. Gajanani, Secretary, GHMC Mahila Satta unit, and Mr. Karthik Chandra, party’s Research & Advocacy group, represented the Lok Satta Party at the APERC’s public hearing on Discoms’ FSA proposals.

“The FSA claims by the Discoms currently being processed by the APERC are for the four quarters each of FY 2010-11 and FY 2011-12. In other words, the FSA claim for the first quarter of FY 2010-11 that ended in June, 2010 i.e. 24 months ago, is yet to be processed and finalized by the commission. This delay is excessive and unjustified and thereby creates severe and avoidable difficulties to all categories of consumers in the State. For instance, the FSA burden from the FY 2009-10 is being levied on individual consumers only now, giving rise to numerous absurd and avoidable situations where large numbers of consumers/residents are being issued bills with backdated FSA i.e. on power consumed not by them but by former residents of the premises.”

The Lok Satta Party said the Andhra Pradesh High Court in a recent verdict underlined the importance of ensuring stability and certainty in the tariff so that consumers are not subjected to severe variations in the price they pay for electricity. The High Court also reaffirmed that while considering the applications filed by the licensees claiming FSA, the APERC must follow the principles of natural justice.

“Timely determination and levy of quarterly FSA burden forms an essential part of ensuring the same. This is precisely why the concerned provisions governing the determination of FSA place time limits on the licensees’ claims so that the consumers are not burdened with accumulated demands in the name of FSA.”

The Lok Satta Party told the APERC that it must immediately end ‘bulk processing’of Discoms’ FSA claims of previous financial years. It must forthwith announce a concrete annual calendar, with pre-determined dates, for processing FSA claims by licensees, conducting public hearings and releasing the final order on FSA.

The Lok Satta also demanded that Discoms fully and clearly disclose the FSA burden to the individual consumer.

“We are given to understand that the Discoms project FSA only as a recovery of ‘incremental costs’ incurred i.e. over and above the tariff-related costs. However, from the FSA claims by the Discoms for the quarters of the FY 2010-11 and FY 2011-12, it is apparent that neither the FSA rate (in Rs/kwh) nor the total quantum of revenue sought to be raised by the Discoms through this FSA route is ‘incremental’ by any standards. In fact, the FSA rate (in Rs/kwh) is comparable to the tariff rate itself and would therefore be a considerable burden on the consumers’ pockets.

‘We therefore urge the APERC to mandate the Discoms to clearly and prominently disclose in their monthly bills and elsewhere, in an understandable and clear manner, about the FSA liability to the consumer on power already consumed but to be determined and levied only at a subsequent and indeterminate point in time.”

The Lok Satta Party also suggested decentralization of distribution and creation of local stake holding for better management and loss reduction for Discoms.