On the eve of the State Assembly election results, the Karnataka Electricity Regulatory Commission (KERC) announced a steep hike in electricity tariff. The commission on Friday approved an average tariff hike of 70 paise per unit across all categories for the financial year 2023-24 --- the the sharpest increase in recent years.
While 57 paise of the increase will be recovered through fixed charges (FC), 13 paise will be recovered through energy charges (EC). The new tariff rates would be applicable from April. The 8.31% increase is expected to bridge a revenue gap of ₹4,457.12 crore.
“To ensure adequate recovery of fixed costs being incurred by the Escoms, KERC has considered gradual increase in fixed/demand charges to all the category of consumers by reducing the energy charges in respect of HT Industries, HT Commercial, LT Domestic and Commercial categories,” the KERC officials said after the tariff revision. For consumers of other categories, there will be a marginal increase in energy charges.
In their proposals submitted to KERC in 2022, the Electricity Supply Companies had proposed an average hike of 139 paise per unit, a 16.83% increase, to cover a revenue deficit of ₹8,951.20 crore.
Citing reasons for the hike, KERC stated that there had been a 13% increase in power purchase costs for FY 24 when compared with FY 23, as the cost of coal and transportation and other costs had all gone up. Along with a revenue deficit of ₹1,720.11 crore from FY 22, a 20% revision of pay and allowance of employees, a 30% increase in interest and finance charges, and a 15% increase in depreciation were also listed as the reasons for the same.
The KERC also noted that the average cost of supply for the State for this financial year had increased to ₹9.12 per unit as against the cost of ₹8.42 per unit in the previous financial year.
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