Torrent Power petitions GERC to raise electricity tariffs, Surat Citizen Council Trust objects

Torrent Power Limited's own company harms customers by purchasing power at exorbitant prices from its subsidiary companies


Surat : Surat Citizen Council Trust (SCCT) has filed objections to Torrent Power Limited’s (TPL) petition in the Gujarat Electricity Regulatory Commission (GERC)—PIL 2180/2023—seeking approval of the new increased power tariff for fiscal year 2023-24.

The SCCT has submitted before the Commission demanding  Forensic Audit of entire operation of Torrent Power Limited, considering the fact that the consumer bears the burden and have to pay for their high salaries and management’s exuberance. However, the SCCT  has requested the suspension of tariff proceedings relating to all aspects of FY 2023-24. In the meantime, existing tariff rates may continue and any gap approved by the Hon’ble Commission in light of Forensic Findings may be recovered from consumers.  This will bring transparency of TPL’s entire operations.

The demands of SCCT are

Torrent Power’s demand increase FPPPA charges to Rs. 2.70 per Unit from the approved price of FPPPA under MYT regulations of Rs. 1.48 per Unit, rise of Rs. 1.22/unit, should be rejected.

The increase in the FPPPA rates is demanded by the petitioner based on the Weighted Average Power Purchase Cost Power purchase estimated cost of Rs. 6.10, an increase of Rs. 1.22/kWh. The price rise demand should be rejected.

Details of projected power purchase that out of its total power requirement, TPL will source nearly 51 %, buying @ Rs. 6.99/kWh, of their power requirement from the long term tied up In-house Power Sources of TPL-G and Sugen/Unosugen Power plants, which produce/offer electricity at rate higher than market rates. This can be verified from their own submission that power purchase cost per unit from Power Exchanges and other bilateral contracts is lower @ Rs. 5.157/kWh. Both long term power supply sources identified by the petitioner is the cause of huge increase of Rs. 1.83/kWh in Power Purchase cost. This Undue Enrichment is violating the provision of Electricity Act 2003. Consumers have to shell out huge amount for no fault of theirs.

Petitioner has not disclosed the process of price discovery for all types of power procurement. It is necessary to examine/evaluate each of them. Electricity Act 2003 clearly emphasise on transparency in bidding process. We submit that the process should be completed by Open Tender Bidding. Then the Commission can decide on the price.

The pattern of power consumption is fairly stable in Surat supply area. Therefore, provision for long/medium term PPA should be more. Only emergency, contingency and spike of short term demand should be met from power exchange.

Therefore, arrangement to purchase power at higher cost compared to market rates is deliberate attempt to misled the commission to believe that the actual power purchase cost of petitioners has gone up, which result in higher tariff rate and detrimental to consumer interests. This methodology is adopted by the petitioner to transfer profit from its units to itself, who in turn sells the produced generation for distribution and sale in its area of distribution at higher cost. This is nothing but an artificial reference of higher power purchase cost of the petitioner and therefore should be rejected. The petitioner must not be allowed Undue Enrichment at the cost of consumer interest.

Petitioner has shown for FY 2023-24 Power Purchase table 40 for 12476.77 MUs and 41 for Rs. 7,616.04 in value. They have not shown the rate/kWh at which it proposes to purchase power from the supply sources.

These facts point to TPL resorting to RESTRICTIVE TRADE PRACTICE.

Gujarat has two ultra-mega power plants of Adani Power and Tata Power. Hon. Supreme Court had intervened in the petition filed by the Tata Power to renew its PPA rate for supply to Govt. of Gujarat, even the rate approved by the Government of Gujarat for a short term supply contract from CCGPL – Mundra was Rs. 4.50/- per Unit, is cheaper than TPL-D/SUGEN/UNOSUGEN, which are described as the principal source of power supply by the petitioner

It is a well-known fact that the power produced from Gas based Thermal Power plants is costlier compared to power produced from the Coal based Thermal Power Plant. Petitioners should be asked to enter into long term power purchase agreement with these 2 Ultra Mega Power Plants to reduce their power purchase cost. If TPL can get higher price for its power, it can do so. But for Surat area it must procure power from competitive sources. Its Surat customers must not be forced to support its high cost power.

Petitioner’s Demand to Charge Rs.1.50/- per Unit as Green Tariff should be rejected as Hon’ble Commission has not considered modality/ordered it. It was rejected last year and should be rejected this year. Notional value cannot form the part of actual tariff.