Bengaluru: The Karnataka Electricity Regulatory Commission (KERC) on Tuesday announced a hike of average 8 % in electricity tariff for 2017-18. The Electricity Supply Companies (Escoms) had sought an increase of 25% i.e., a hike of ?1.48 per unit this time.

The average tariff increase is now 53 paise per unit ranging from 20 paise to 55 paise per unit for all categories. In the case of Bescom areas, three additional slabs have been introduced. “The electricity tariff hike is from April 1, 2017. The delay in hiking the tariff is due to late submission by Bengaluru Electricity Supply Company (Bescom) seeking permission for hiking electricity tariff. The Bescom has submitted the proposal on March 31 instead of March 24. So, the delay in announcing the electricity tariff hike,’’ M K Shankaralinge Gowda, Chairman, KERC, told reporters here.

The reasons given for the electricity tariff hike include recovery of revenue gap of Rs. 2,296 crore for FY 16-17 (which accounts for 42 paise per unit), increase in electricity purchase cost for 17-18 (which is about six paise), increase in fuel cost of thermal power plants and fuel adjustment cost (FAC) amounting to Rs. 280 crore, causing an average increase of 20 paise per unit.

In order to encourage consumption from HT consumers under the industrial and commercial categories, the tariff increase for consumption in the second slab (beyond one lakh units) is 50% lesser than the increase in the first slab (20 paise in second slab, 40 paise in first slab).

The KERC has introduced The Time of Day tariff for HT consumers for usage in the morning peak hours (6 a.m. to 10 a.m.) as well. The incentive and penalty of Re. 1 per unit was already applicable for evening peak hours. “The Time of Day tariff will affect small and medium industries. The industries that function in three shifts will be affected badly,’’ M G Prabhakar, chairman, energy committee, Federation of Karnataka Chambers of Commerce, said.

Expressing similar opinion, Thyagu Valliappa, president, Bangalore Chamber of Industry and Commerce (BCIC) said the electricity tariff hike comes as a severe blow to consumers especially the industrial sector. “The electricity supply companies should reduce pilferage of transfer and distribution losses which runs over 18 percent,’’ Thyagu Valliappa said.

A rebate of 50 paise per unit has been allowed for Effluent Treatment Plants within premises of industries covered under High Tension-2 (a) tariff. The KERC has drawn up guidelines to fix responsibility on officers of Escoms to conduct monthly grievance redressal meetings. The commission will levy a penalty up to Rs. 1 lakh per sub division by the officer concerned.

BCIC opposes power tariff hike

The Bangalore Chamber of Industry and Commerce today expressed its unhappiness over the hike in the electricity tariff announced by the Karnataka Electricity Regulatory Commission (KERC) by a steep 48 paisa/unit. The five State Escoms had filed petitions with KERC seeking Tariff revision to offset its revenue loss by Rs. 1.48/- per unit.

Thyagu Valliappa, President, BCIC reacting to the steep power hike of 48 paisa per unit said: “The tariff hike comes as a severe blow to consumers especially the industrial sector as this will place an additional burden and impact the bottom-lines of corporates. The Chamber had represented to the KERC stating that instead of opting for the tariff revision, the ESCOMs should reduce pilferage of their T & D losses which runs over 18 percent, review subsidies and also look at overhauling old transformers which are inefficient and major power guzzlers. All of these will result in the avoidable revenue losses to the ESCOMs, thereby not burdening the residential and industrial consumers.”

The tariff revision comes close on the heels the government fixing the Minimum Wages in Karnataka to Rs. 10,000 month severely impacting the Business and Industry in State.

Thyagu further said: “Electricity is one of the key drivers for rapid economic growth and poverty alleviation. The Power cost is also one of the key components for the manufacturing sector. The National Tariff Policy emphasizes the need to ensure availability of electricity to different categories of consumers at reasonable rates”.

Thyagu Valliappa said: “The increase in power tariff will further add to the costs of production when the industry is reeling under unscheduled power cuts and sudden power outages which cause severe assembly line disruptions.”

Meanwhile, the Chamber however, welcomes KERC’s order that it has not allowed Rs. 1.48 per unit as demanded by the five ESCOMs.