Temporary relief for consumers

If you think the seven-month delay in revising electricity tariffs has saved you from paying more, given that the new tariffs will be applicable after November 1, then here is the bad news: the relief is only temporary.

The Karnataka Electricity Regulatory Commission (KERC) has said that against the total revenue gap of ₹2,473 crore, ₹1,443 crore that would have been recovered as additional revenue towards tariff revision for seven months from April 1, 2020 to October 31, 2020 has been kept as ‘regulatory asset’ to be recovered from the consumers in the financial years 2022 and 2023.

This, the commission said, is to “ensure that the consumers are not burdened owing to adverse economic conditions during the COVID-19 pandemic”.

Pendency of an appeal filed by KPTCL before the Appellate Tribunal for Electricity (ATE) against a KERC order issued in January 2020, which was disposed in October, and the election code of conduct coming into force also caused delay, the commission said.

The remaining revenue gap of ₹1,030 crore will be allowed to be recovered during the five-month balance period in the current financial year by tariff revision, the KERC has said.

Fixed charges up

In another blow to consumers, fixed charges (FC) have been increased by ₹10 per kW/HP/kVA for all installations except irrigation pumpsets.

Defending this, the KERC has said: “As per the current tariff structure, the recovery of FC from consumers is not commensurate with the actual fixed expenditure being incurred by the ESCOMs. A substantial part of the FC is being recovered through energy charges. The current level of recovery of fixed charges is only 27.73% and the remaining fixed charges are being recovered through energy charges. To ensure full recovery of FC, the commission has decided to increase the FC gradually year on year. With this marginal increase in the FC, the recovery would be to the extent of 33%.”

Category-wise increase

The increase in tariffs is uniform across all ESCOMs with a marginal differential increase in the BESCOM area. The slab-wise increase in the energy charges is ranging between 20 paise to 25 paise per unit across all categories except for Bangalore Metro Rail Corporation Limited, battery charging station for electric vehicles (EVs), while there is an increase of 50 paise per unit for temporary installations, the KERC release said. The average increase in tariff, including the fixed charges, is 40 paise per unit.

Category-wise, for domestic consumers, installations of government or charitable educational institutions, and hospitals serviced by BESCOM in the BBMP and other municipal corporation areas, the overall tariff increase is 25 paise per unit

The increase in tariff for LT industrial consumers, HT industrial users, LT commercial category users, and private educational institutions and private hospitals is 25 paise per unit.

Last year, the commission had allowed a 33 paise per unit increase across all ESCOMS against the hikes they had sought, ranging from ₹1 to ₹1.67 per unit. This year, BESCOM sought a massive ₹1.96 per unit hike citing a revenue deficit of ₹5,872.08 crore for 2020-21.

‘Untimely hike’

Reacting to the tariff hike, Y.G. Muralidharan from the Karnataka Electricity Governance Network (KEGN) said the regulatory asset itself is staggering it for future areas and is a liability for consumers. “It is also important to look at the power purchase cost as it is around 50% to 55% of the tariff. This year, ideally, they should have purchased more hydel with such copious rain,” he said.

Energy expert M.G. Prabhakar said, “Apart from the tariff creation of ₹1,443 crore regulatory asset combined with regulatory asset creation arising out of the ATE order on KPTCL true up to ₹1,331 crore for five-year period would have a telling effect on manufacturing. Investment and production will take a beating,” he said.


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