Karnataka hikes electricity tariff, opposition terms decision ‘disastrous’

Further, the Karnataka Electricity Regulatory Commission has said that the revised tariff arrears would be recovered from consumers during the months of October and November this year "without charging any interest."

Karnataka government Wednesday announced an average hike in electricity tariff by 30 paise per unit for all electricity supply companies (Escoms) for the ongoing fiscal 2021-2022.

The revision, as notified by the Karnataka Electricity Regulatory Commission (KERC), would result in an average increase of 3.84 per cent. The revised tariff will be considered for each unit of electricity consumed from the first meter reading date falling on or after April 1 this year, the Commission noted, to “enable recovery of the revenue gap determined by the Commission.”

Further, the Commission has said that the revised tariff arrears would be recovered from consumers during the months of October and November this year “without charging any interest.”

Why the hike?

Explaining the reason behind the hike, KERC officials said the increase in tariff was necessitated due to three factors – recovery of regulatory asset (5.46 p/unit), regulatory asset created by KERC in view of the adverse financial situation due to Covid-19 (11.89 p/unit), and the overall increase in operational costs of Escoms (12.64 p/unit).

Further, the Commission has also cited the “increase in the cost of power purchase due to procurement of energy from new thermal stations and from Renewable energy sources to meet the demand” as another reason behind the latest revision.

KERC noted that the increase in tariff had become “inevitable” as input costs towards operation, maintenance, and borrowings for capital expenditure were also increasing every year.

Last year, in November, the KERC had announced a hike in tariff by an average of 40 paise for the previous fiscal (2020-2021). However, it was decided to make the then revised tariff applicable only from November and not April (as usual), saying it would ensure “consumers are not burdened during the adverse economic conditions during the pandemic.”

How will it affect domestic consumers?

The increase in energy charges for domestic consumers across the state is 10 paise per unit. The same revision will be applicable to installations of government/charitable educational institutions and hospitals in BESCOM (BBMP & the other Municipal Corporation areas) as well.

However, the first slab (lifeline consumption) has been revised till 50 units as opposed to the 0-30 units considered earlier. “This is to encourage consumption by lower and middle-class domestic consumers,” KERC noted. The consequent slabs are from 51 to 100 units, 101 to 200 units, and above 200 units.

The increase in tariff for industrial and LT commercial category consumers is also notified to be at 10 paise per unit.

Decision to hike electricity tariff ‘disastrous’: Opposition

Reacting to the hike in electricity tariff, the Opposition in Karnataka has termed it “disastrous for everyone.”

Leader of Opposition Siddaramaiah said the increase will “kill everyone” as from common citizens to industries, “all are suffering due to the pandemic.” The former chief minister also questioned the government’s decision to purchase electricity from others.

“Karnataka has surplus power and yet the BJP-led government continues to purchase power from Central grid, Adani, and others at a higher cost, for which our people have to pay the price,” he alleged.

The senior Congress leader added, “It is unfortunate that CM Yediyurappa is not able to keep his head high in front of Narendra Modi and Adani.”

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