Private sector power utility CESC, catering to over 25 lakh subscribers in Kolkata, wants its customers to pay ₹998 crore of the ₹1,045-crore penalty imposed on it by the Supreme Court. The RP-Sanjiv Goenka Group flagship has submitted a claim to this effect to the state electricity tariff regulator.
Last year, the court had imposed ₹295 a tonne ‘additional levy’ on captive block allottees for every tonne of fuel extracted from such assets till March 31, 2015. CESC was asked to pay ₹1,045 crore (most of which has already been paid as a precondition to participate in the coal block auction). The levy is payable to the Centre.
In a disclosure issued on Thursday, the company said of the total, ₹998 crore is “recoverable by way of tariff” as fuel cost.
CESC was the first company in the country to be awarded a captive asset at Sarishatola in West Bengal in 1993. The mining was carried out by a group outfit, The Integrated Coal Mining Ltd (ICML), but the fuel was transferred to CESC at Coal India prices.
The mining profits were retained by the group as the power users were charged the Coal India parity price for fuel.
Information available with the Registrar of Companies suggests that ICML earned a gross margin of over 14 per cent on a turnover of ₹300 crore in 2012-13.
If the electricity regulator approves CESC’s claim for recovery of the levy, consumers will end up paying substantially higher than the CIL prices for fuel.
Jump in profitsCESC reported nearly 120 per cent rise in net profit at ₹244 crore during the January-March quarter. The high profit growth came on around 13 per cent increase in sales turnover. Net margin stood at 17.23 per cent.
For the entire fiscal, profit rose 7 per cent to ₹698 crore. The company’s board has proposed a dividend of 90 per cent or ₹9 a share. The CESC stock closed at ₹587.35 on the BSE, down 0.30 per cent.