Karnataka hikes power tariff by 70 paise; industries, commercials, EV points get relief

The steep increase in power tariff comes a day before the announcement of election results

Amid mercury soaring high over election results, Karnataka has raised the power tariff by 70 paise per unit, in one of the steepest hikes in a decade.

Karnataka Electricity Regulatory Commission (KERC) gave the green light to the 70-paise tariff hike on May 12. Out of the 70 paise, 57 paise will be recovered through fixed charges, and the remaining 13 paise will be recovered as energy charges.

“To bridge the approved revenue gap of Rs 4,457.12 crore, the commission has approved an average increase in consumer tariff by 70 paise per unit in all categories, which accounts for an overall increase of 8.31 percent," a KERC order said. The revised tariff is effective from April 1, 2023.

It may be recalled that electricity supply companies (Escoms) had demanded a hike of Rs 1.39 per unit to bridge the revenue deficit of Rs 8,951.20 crore for FY24.

The commission, in its press release, stated that the revision was necessitated due to a 13 percent increase in power purchase cost, caused by the rise in the cost of coal and transportation, a revision of pay and allowance of employees by 20 percent, a 30 percent increase in interest and finance charges, and a 15 percent increase in depreciation.

Relief for industries and commercial establishments, EV charging units

Under the Discounted Energy Rate Scheme (DERS), to encourage industries and commercial establishments to consume more power, the KERC has approved reductions in energy charges from Rs 6 to Rs 5 per unit. "The scheme, which was applicable to HT consumers, is now extended to LT industries and LT commercial installations with a sanctioned load of 50 KW and above," it said.

To encourage the use of electric vehicles, tariff for EV charging stations have been reduced from Rs 5 per unit to Rs 4.5 per unit.

The rebate for micro and small industries of 50 paise per unit will be continued for one more year. The rebate of 30 paise per unit will be continued for all rural customers, it said.

As part of tariff rationalisation and simplification, urban and rural categories are merged into one category, and a rebate of 30 paise per unit is allowed for all rural consumers.