The Andhra Pradesh High Court on Tuesday passed a common order refusing to interfere in the process of collection of fuel surcharge adjustment (FSA).
While disposing 175 cases filed relating to collection of surcharge, the court ordered that the surcharge could be collected for three quarters of 2010-11, four quarters of 2011-12 and first quarter of 2012-13 over two years.
However, the court directed distribution companies not to levy the surcharge for the first quarter of 2010-11, which is due in December 2012.
Fuel surcharge is the difference of cost of service approved by the AP State Electricity Regulator and the actual cost incurred by the Discoms.
When the annual revenue requirement statement was filed, the State electricity regulator determined the tariff with a condition that the surcharge will be added during the course of time, considering the difference in cost of coal, gas and high cost of procurement of power required to meet consumer demand.
The actual cost of service has been increasing due to impact of inflation and input costs required for generation. The actual cost of service has gone up from Rs 4.26 per kwh in 2008-09 to Rs 4.94 in 2011-12.
In a statement, the Transmission Corporation of Andhra Pradesh said the additional cost incurred is purely to maintain power supply to consumers and is now being passed on to the consumers in the form of fuel surcharge adjustment.
Inflationary effect
Transco has said due to inflationary effect of around 10.05 per cent and unforeseen additional taxes and royalties, the cost of coal has increased by 15-17 per cent over the projected rates. The Discoms are, therefore, forced to levy the surcharge to ensure financial viability.