The Karnataka Electricity Regulatory Commission (KERC) has approved an average increase in tariff by 30 paise per unit for FY 2021-22 with an average increase of 3.84 per cent.

The ESCOMs in the State had sought an average increase of 135 paise per unit accounting for 17.31 percent increase. The Commission has also determined revised retail supply tariff for consumers of Mangalore Special Economic Zone (MSEZ) at Mangaluru and AEQUS SEZ in Belagavi District.

The revised retail supply tariff includes the revised transmission tariff to be payable by ESCOMs to KPTCL for FY2021-22. The revised tariff is to come into effect for the electricity consumed from the first meter reading date falling on or after April 1, 2021.

Reason for tariff hike

Providing its reasons behind the increase in tariff, KERC said the increase is necessitated due to recovery of regulatory assets (RA) created as per the Orders of the Appellate Tribunal for Electricity (ATE) dated October 5, 2020 (5.46 paise per unit).

Regulatory Assets were created by KERC in its order dated November 4, 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).

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, it said.

Highlights of the new tariff order:

  • Removal of morning and evening peak under ToD tariff: To encourage increase in consumption among HT installations, the penalty of ₹1 per unit, for usage of energy during morning peak between 6 am to 10 am was withdrawn in the Tariff Order 2020 and the same is continued.
  • The new discounted energy rate scheme: In order to encourage increase in consumption over and above their base / normal consumption by the HT installations viz., industries, commercial, hospitals, educational institutions, universities, hostels of all educational institutions, especially during the power surplus / monsoon /off season period of July to December, the Commission has approved the special ‘Discounted Rate Scheme’.
  • Increase in LT Power sanction threshold to 150 kW: To enable ease of doing business (EODB), the Commission has increased the threshold limit of availing power at 400V, 50 cycles, 3-phase to 150 kW from the existing 50 kW limits.
  • 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.
  • Rebate for use of LED bulbs in public lighting: To promote conservation of energy through use of LED bulbs in public lighting, the Commission is continuing the rebate of 105 paise per unit, for installing LED / Induction lamp lighting to streetlight installations by the urban and rural local bodies including BBMP.
  • Special incentive scheme for HT consumers: Special Incentive Scheme has been continued for FY22 for all the HT Consumers for usage of energy during 10 am to 6 pm by allowing an incentive of ₹1 per unit, over and above their base consumption and for the consumption during the night i.e., 10 pm to 6 am an incentive of ₹2 per unit is being allowed for all the units consumed.
  • No increase in tariff to BMRCL: To encourage commuters to use public transport, the Commission has not increased the tariff to BMRCL and approved to continue the existing concessional tariff of ₹5.20 per unit and has fixed the concessional tariff to Railway traction at ₹6.55 per unit by increasing 10 paise per unit, round the clock without ToD tariff and Special incentive scheme.
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