The Hindu : Karnataka / Bangalore News : Deposit system of ESCOMs draws flak

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Thursday, Aug 09, 2007
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Karnataka

Karnataka - Bangalore

Deposit system of ESCOMs draws flak

Staff Reporter

‘A security deposit of two months is sufficient’

Bangalore: Several consumers and consumer rights’ groups raised objections to the electricity supply companies collecting three months minimum deposit (MMD) as security against non-payment of electricity bills, at a Karnataka Electricity Regulatory Commission (KERC) hearing here on Wednesday.

Govindappa, a former engineer with the erstwhile Karnataka Electricity Board, said that the commission should direct the electricity supply companies to decrease the monthly deposit for industrial consumers.

“If the deposit amount for the industrial consumers is reduced, they will use more power and it is the ESCOMs who will benefit,” he said.

M.G. Prabhakar of the Federation of Karnataka Chambers of Commerce and Industry said that the security deposit should not mean only cash deposits. “The security deposit can mean a bank guarantee or a National Savings Scheme certificate,” he said. He also said that while the three MMD was being calculated, the average cost of supply should also be taken into account.

Mr. Prabhakar told the commission that the security deposits were transferred from KPTCL to ESCOMs after they were formed.

“In the process, Rs. 575 crore went missing. I urge the commission to order a third party investigation in the matter.”

He maintained that a security deposit of two months was sufficient, as the billing cycle had changed. “It is the defaulters who should be charged three MMD. The collection efficiency has increased and there is no need for ESCOMs to charge three MMD.” Y.G. Muralidhar, consumer activist, said all ESCOMs should give a statement of accounts, pertaining to the monthly deposit, to its consumers. He also said that in case of refunds, the ESCOMs should pay immediately. “In case of any delay in repaying the deposit amount, the ESCOMs should pay it as soon as possible along with one per cent interest.”

Replying to the objections, Vishwanath G. Hiremath, legal adviser to KPTCL and ESCOMs, quoted sections of the Electricity Act, 2003, and said that the monthly deposit referred to “all monies, including fixed charges”.

“What is a reasonable security is subject to interpretation. The Supreme Court has also determined that collection of three MMD was reasonable.”

V.G. Pandith, Financial Officer, BESCOM, said if the monthly deposits were to be reduced, the utilities would face resource crunch.

KERC chairman K. P. Pandey and H. S. Subramanya, member, heard the petitioners.

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