The
political consent to increase power tariff for the third consecutive
year has come as a surprise to the state electricity board. It also
signals the end of an era of cross subsidy in power sector in the state.
Since it was not sure about obtaining clearance from the government for
another tariff increase, KSEB was making moves to place the demand for
power tariff surcharge before the state electricity regulatory
commission.
The fuel surcharge due to the board on account of the additional expenditure it incurred for purchase of thermal power to meet the power demands in 2013-14 comes to around Rs 2,500 crore. Though the board is supposed to file surcharge petition every financial quarter, the same has not been done for the past one year.
According to sources, power minister Aryadan Mohammed agreed with the KSEB’s demand for a power tariff hike just couple of days before the board filed the tariff petition on May 14. The board had earlier sought more time from the regulator for filing of the Aggregate Revenue Requirement and Expected Revenue from Charges (ARR &ERC) charges for 2014-15 and filed the same only after general elections.
“If the amendments proposed in the electricity act get the clearance of Parliament, KSEB would land in a tight spot. If proposal for giving permission to private agencies to function as distribution licensees gets the Parliament stamp and the congestion in the power corridor goes off, private players will certainly start poaching the commercial and HT/EHT consumers of the board. Hence, the earlier practice of taxing the creamy consumers more keeping the power tariff for domestic consumers would no longer become possible in the long run,” a top official in the board said. It was this realization that forced the government to approve the hike.
The fuel surcharge due to the board on account of the additional expenditure it incurred for purchase of thermal power to meet the power demands in 2013-14 comes to around Rs 2,500 crore. Though the board is supposed to file surcharge petition every financial quarter, the same has not been done for the past one year.
According to sources, power minister Aryadan Mohammed agreed with the KSEB’s demand for a power tariff hike just couple of days before the board filed the tariff petition on May 14. The board had earlier sought more time from the regulator for filing of the Aggregate Revenue Requirement and Expected Revenue from Charges (ARR &ERC) charges for 2014-15 and filed the same only after general elections.
“If the amendments proposed in the electricity act get the clearance of Parliament, KSEB would land in a tight spot. If proposal for giving permission to private agencies to function as distribution licensees gets the Parliament stamp and the congestion in the power corridor goes off, private players will certainly start poaching the commercial and HT/EHT consumers of the board. Hence, the earlier practice of taxing the creamy consumers more keeping the power tariff for domestic consumers would no longer become possible in the long run,” a top official in the board said. It was this realization that forced the government to approve the hike.
Source: TOI
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