Electricity tariffs hiked by 30 paise per unit

The Karnataka Electricity Regulatory Commission (KERC) has approved revision of electricity retail supply tariff applicable to the consumers of all the Electricity Supply Companies (ESCOMs) and Hukeri Rural Electricity Cooperative Society in the State of Karnataka, for the Financial Year 2022.

The Commission has approved an average increase in tariff by 30 (thirty) paise per unit (considering increase in Fixed / Demand and Energy charges) for FY 2021-22, resulting in an average increase of 3.84%.

The ESCOMs had sought an average increase of 135 paise per unit accounting for 17.31% increase.

Effective Date: The revised tariff will come into effect for the electricity consumed from the first meter reading date falling on or after 1st April, 2021.

To enable recovery of the revenue gap determined by the Commission as per this Tariff Order, the Commission decides that, the revised tariff shall be given effect for the energy consumed from the 1st meter reading date falling on or after 1st April 2021. However, to soften the burden of increase in tariff on the consumers, during the prevailing lockdown situation on account of Covid – 19 pandemic in the State, the arrears towards revision of Tariff for the month of April 2021 and May, 2021 is ordered to be recovered during the month of October 2021 and November, 2021 respectively, without charging any interest.

Increase in the first slab of 30 units to 50 units for Domestic Tariff To encourage consumption by lower and middle-class domestic consumers, the first slab of 0-30 units (Lifeline consumption) has been increased to 0-50 units.

For the domestic consumers in areas coming under Municipal Corporations and Urban Local bodies of other ESCOMs, the tariff for monthly consumption of up to 50 units (earlier up to 30 units) is increased from Rs.3.95 per unit to Rs.4.05 per unit and for consumption between 51 units to 100 units (earlier 31 to 100 units), the tariff is increased from Rs.5.45 per unit to Rs.5.55 per unit. The tariff for monthly consumption of 101-200 units is increased from Rs.7.00 to Rs.7.10 per unit. The tariff for monthly consumption of above 200 units is increased from Rs.8.05 to Rs.8.15 per unit. For the domestic consumers in village panchayat areas of other ESCOMs, the tariff for monthly consumption of up to 50 units (earlier 30 units) is increased from Rs.3.85 per unit to Rs.3.95 per unit and for consumption between 51 to 100 units (earlier 31 to 100 units), the tariff is increased from Rs.5.15 per unit to Rs.5.25 per unit. The tariff for monthly consumption of 101-200 units is increased from Rs.6.70 to Rs.6.80 per unit. The tariff for monthly consumption of above 200 units is increased from Rs.7.55 to Rs.7.65 per unit.

Reasons for Increase in Tariff:

The increase in tariff is necessitated due to, • Recovery of Regulatory Asset (RA) created as per the Orders of the Hon’ble Appellate Tribunal for Electricity (ATE) dated 05.10.2020 (5.46 Paise per unit). • Regulatory Asset created by KERC in its Order dated 04.11.2020 due to the delayed issue of Tariff Order for FY21 in view of adverse financial situation prevailing among all the sectors of economy due to Covid-19 pandemic (11.89 Paise per unit).

Reasons for delay in pronouncing Tariff Order: The delay in pronouncement of Tariff Order 2021 is attributable to the following reasons: • Election Code of Conduct coming into force in the State on account of Election to the two (2) State Assembly constituencies at Maski and Basavakalyan and one (1) Lok Sabha Constituency at Belgaum as notified by the Election Commission of India vide Notification No ECI/PN/28/2021 dated 23rd March, 2021. • Election Code of Conduct coming into force in the State on account of announcement of Elections to the City Corporations, City Municipal Councils and Urban Local Bodies in Karnataka scheduled to be held on 27th April 2021, announced vide Notification dated 29th March, 2021 by the State Election Commission. • Government of Karnataka issued guidelines vide the Notification No RD 158 TNR 2020 dated 26th April, 2021, Notification No RD 158 TNR 2020 dated 7th May 2021 and Notification No RD 158 TNR 2020 dated 21st May 2021, prohibiting working of certain offices / activities in the entire State up to 07.06.2021, to prevent the spread of Covid – 19 Pandemic, which hampered day to day work of the Commission.

The remaining increase (12.64 Paise per unit) is towards overall increase in the operational costs of ESCOMs, which includes the approved revenue deficit as per APR for FY20 and also 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. • The input costs towards Operation & Maintenance and borrowings for capital expenditure are also increasing year on year. • Hence, in order to enable the ESCOMs to carry on their business of supplying the electricity, which is the basic need of the Society, the increase in the tariff has become inevitable.

Special Incentive Scheme for HT Consumers Special Incentive Scheme introduced in Tariff Order 2018, has been continued for FY22 for all the HT Consumers for usage of energy during Page 7 of 15 10.00 Hrs to 18.00 Hrs by allowing an incentive of Re.1 per unit, over and above their base consumption and for the consumption during the night i.e., 22.00 Hrs to 6.00 Hrs an incentive of Rs.2 per unit is being allowed for all the units consumed. Penal charges of one Rupee per unit would be levied for the energy consumed during the evening peak hours between 18.00 Hrs to 22.00 Hrs as approved in Tariff Order 2021.