Karnataka industry jittery over move for power tariff hike

Industries in Karnataka have expressed concern over the proposal for steep hike in power tariffs by electricity supply companies (Escoms).

Recently, five Escoms – Bescom (Bengaluru), Hescom (Hubli), Gescom (Gulbarga), Chescom (Chamundeshwari), Mescom (Mangaluru), petitioned the Karnataka Electricity Regulatory Commissions (KERC) seeking upward revision of power tariffs by up to ₹1.02 a unit.

Industry and trade are alarmed over the quantum of hike sought by Escoms and its cascading effect on the general prices. All these years Escoms sought hikes ranging from 66 paise to 88 paise.

The industry feels that while Escoms must target to reduce the AT&C losses to less than 10 per cent, timely commissioning of ongoing power projects would meet the future demand as well as reduction of short-term power purchase agreements at high cost.

The industry has demanded the replacement of high power consuming pumpsets for agricultural use with high efficiency pumps should be taken up expeditiously.

The Escoms should also look at the efficiency improvement (loss reductions, maintenance of higher PLF of existing projects) which can take care of their revenue deficit.

In their petitions filed, the Escoms are learnt to have indicated a huge revenue deficit and sought that they should be allowed to increase the tariff to bridge this gap his has alarmed the industry.

“The industry is already facing severe hardship due to unscheduled power cuts, poor frequency, and staggered holidays of industry across the State and is struggling to manage its production and growth. The proposed hike of more than one rupee per unit will only further aggravate the situation and shall erode margins of the industry which is already facing multiple challenges. This will result in increase in prices leading to higher inflation,” said Anuj Sharma, President, Bangalore Chamber of Industry and Commerce (BCIC).

Thyagu Valliappa, Senior Vice-President, BCIC, said, “What remains unexplained is the continuing high aggregate technical and commercial (AT&C) loss and a very slow rate of improvement on this aspect. It was expected that on account of better availability of power in the coming months, fall in commodity prices (eg coal), there will be no tariff increase in the coming financial year.”

BCIC has suggested that instead of increasing tariff, Escoms should offset its finances by ensuring efficient administration cut administrative and distribution costs and also provide adequate infrastructure for their optimal functioning as well.

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