KERC hearing on electricity tariff hike
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KERC hearing on electricity tariff hike

February 15, 2024

CESC asked to improve efficiency instead of burdening consumers

Mysore/Mysuru: Power consumers from various categories, spanning domestic and industrial sectors, have collectively rejected the proposed power tariff increase presented by the Chamundeshwari Electricity Supply Corporation (CESC).

At a public hearing convened by the Karnataka Electricity Regulatory Commission (KERC) at the Zilla Panchayat Hall yesterday, consumers vehemently urged the KERC to dismiss CESC’s appeal to raise the power tariff by 50 paisa per unit across all slabs for the financial year 2024-2025, citing revenue deficit.

Chaired by KERC Chairman P. Ravikumar and assisted by member M.D. Ravi, the hearing witnessed intense discussions from concerned stakeholders. Annually, Electricity Supply Companies (ESComs) are mandated to seek tariff revisions from the KERC.

Once all petitions are received, the KERC schedules public hearings. Yesterday’s session focused specifically on the Mysuru region, considering the importance of local input in  regulatory decisions.

Many stakeholders, including the public, organisational representatives and industrialists participated in the meeting and voiced their opposition to the proposed electricity rate hike.

Representatives from the Mysore Chamber of Commerce and Industry (MCCI), Mysore Industries Association (MIA), KIADB Industrial Area Manufacturers’ Association (KIAMA), Hebbal Industrial Estate Manufacturers Association (HIEMA), Karnataka Small Scale Industries Association (KASSIA) and representatives of consumers and farmers were present.

According to officials, CESC requires a revenue of Rs. 7,379.89 crore in 2024-25. An expected revenue of Rs. 6,940.34 crore leaves a deficit of Rs. 439.55 crore. To address the shortfall, CESC proposed a tariff revision of 50 paisa per unit across all slabs.

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However, despite CESC’s rationale for the increase, a majority expressed dissent, underlining the need to reduce unnecessary expenses and explore alternative revenue sources instead of resorting to rate hikes. Stakeholders suggested that rather than raising tariffs, CESC should focus on improving its overall performance and minimising administrative expenditure.

Tariff revision unnecessary

Stakeholders argued that CESC was burdening consumers with the proposed hike without adequately addressing the inefficiencies. They contended that if CESC improved its performance and addressed critical issues, tariff revision would be unnecessary.

Suresh Kumar Jain, Secretary of Mysore Industries Association, expressed concerns that the proposed hike could further destabilise industries already facing crises.

He suggested that by implementing specific measures, CESC could potentially reduce tariffs by 50 paise to Rs. 1 per unit across all slabs.

Jain emphasised that the Government should not burden industries and commercial sectors with cross-subsidy loads. He argued that any subsidies provided by the Government should not be recouped from industries and other sectors, but should be covered by the Government itself.

K. Ravindra Prabhu of KIAMA highlighted the burden of high upfront costs imposed by CESC, suggesting that consumers may reduce their electricity consumption or seek alternative suppliers if rates continue to rise. He emphasised that the existing rates must be reduced rather than increasing them.

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