The Kerala State Electricity Regulatory Commission (KSERC) proposes an amendment to the tariff regulations whereby the repayment of both principal and interest on bonds issued to the master trust (pension fund) of the Kerala State Electricity Board (KSEB) will be reckoned for calculating the utility’s aggregate revenue requirement (ARR).
This has been a contentious issue. A section of electricity consumers argue that including the principal amount will pass on the hefty burden of its repayment to the consumers through the electricity tariff.
The Commission intends to hold a public hearing on the proposed amendment before finalising its decision.
The master trust was formed for meeting the pension liabilities of KSEB when it was made a company in 2013.
The amendment proposed to clause 34(iv) of the KSERC (Terms and Conditions for Determination of Tariff) Regulations, 2021, reads as follows: “The amounts required for the payment of both the principal and interest on the bonds issued to the Master Trust from time to time and which are serviced by KSEB shall be reckoned for computation of aggregate revenue requirement and for truing up of accounts of KSEB Ltd.”
The draft of the proposed regulation can be accessed on erckerala.org.
Consumers can also convey their objections and suggestions to the Commission on the matter by December 19.
he tariff regulations issued in November 2021 had provided for the amounts required for the payment of interest and the principal on bonds issued to the Master Trust to be reckoned when calculating the ARR. But in September this year, the High Court, on a petition filed by the HT/EHT Industrial Consumers Association, had quashed this provision on the grounds that the original draft of the regulation did not mention the repayment of the principal.
But the High Court had added that it was open to the Commission to specify the terms and conditions with regard to the repayment of the principal amount by following proper procedure as prescribed in the Electricity Act. The Commission has proposed the latest amendment in view of this “liberty granted by the High Court to relook into the matter.”
