BEST hints at rate hike, a day after losing case against Tatas

Presently, BEST charges Rs 3.85 per unit for customers consuming up to 100 units and Rs 7.11 for those consuming up to 300 units of electricity BEST charges Rs 9.99 per unit for those consuming up to 500 units and Rs 12.94 for those consuming above 500 units.

 Gupta said that since BEST's electricity business cross-subsidies its transport business, the switchover would have a severe impact on the latter.

“Tata Power's entry poses a threat to BEST as it will not only impact our power distribution business but also our transport vertical, because it cross-subsidies the latter. Now MERC would have to approve a revised tariff plan which we will have to submit to cross-subsidise our transport business,” he said.

The BEST committee will meet on May 19 to take a final decision on the tariff.

In its petition, BEST had argued that since it is a local authority, no persons situated in its area of supply could avail electricity from any other licensee, and that TPC could not extend its network in BEST's area of supply, without the latter's consent and agreement.

In its order yesterday, the Supreme Court dismissed BEST's petition against TPC's bid to enter its distribution area and observed, “...it becomes clear that there is no exemption from universal service obligation to any distribution licensee under the Electricity Act, on account of the presence of a “local authority” as a distribution licensee in the particular area of supply.

The National Electricity Policy clearly states that the second licensee in the same area shall have the obligation to supply to all consumers in accordance with the Act”.  It further said, “It is, therefore, difficult to accept the extreme position taken by the appellant (BEST) that if the local authority is a distribution licensee in a particular area, there cannot be any other distribution licensee in that area without permission of such a local authority.

  “Not only such a contention would negate the effect of universal supply obligation under the Act, it will also amount to providing an exception which is not there either in Section 43 or Section 14 of the Act, namely to treat local authority in a special category and by giving it the benefit, even that benefit which is not specified under the Act.”