Another Power Tariff Hike Awaits Keralaites In Oct

Thiruvananthapuram, May 26: | Updated: May 27 2003, 05:30am hrs
The Kerala State Electricity Board (KSEB) has set the ball rolling for another tariff hike. The state's first power tariff hike through the State Electricity Regulatory Commission (SERC) route is likely to happen in October.

Once KSEB hands over its note to SERC this week, the commission will issue notification and open public hearing in two weeks. Considering that it is a maiden experience for Kerala, the final verdict may drag to October, SERC chairman MKG Pillai told FE.

This time, Kerala consumer may have to take an extra hike of 30-40 paise per unit. When the production costs are Rs 3.71 per unit, KSEB sells power to consumer at Rs 2.30 per unit. Even a ten per cent hike will not affect Kerala's status as the southern state with the cheapest power, KSEB sources said.

Apart from the pressure from the Union power ministry to get cracking with the power reforms, the state government has also been told by the Planning Commission to make power pricing in line with production costs. The full board meeting of KSEB, scheduled to take place last week, has been reset to this week. Senior board officials have been busy working out the latest revenue details that SERC had sought.

"However, to the commission, there is nothing sacrosanct about the report from KSEB. Every figure furnished by the board will be studied from all angle. No fooling around on the figures on T&D losses will be allowed," SERC chairman said.

Scrapping subsidies is a major item in the 3-year action plan put forward by Crisil, signed up by KSEB to make a tariff petition. At present, in Kerala, consumers who use less than 20 units and farmers have been exempted from paying for power.

KSEB's annual income stood at Rs 2600 crore, where at least Rs 3500 crore is needed. Crisil recommendations are that apart from the present rate for domestic consumers, Rs 10 should be charged as fixed component. Although no change has been recommended on the rates for industrial consumers, a slight change in fixed charge component cannot be ruled out.

For the Kerala government, tariff revision had always been a hide-and-seek issue. Last August, the state cabinet had cleared a sweeping power hike in a mark-up band of 0-75 per cent. This was promptly dropped next week, following public protest. Later another hike in 23-50 per cent band was made for domestic consumers. Industrial consumers had got away with an across-the-board hike of 50 paise per unit. This time, the difference is that, the blame will be on SERC.

The only way to avert a power tariff hike will be to recover Rs 600 crore due to board from state PSUs in electricity bill, KSEB sources said. But then, that is another touchy issue.