Amid pandemic, K’taka raises power tariff, Oppn slams move

Bengaluru The Karnataka government on Wednesday increased the electricity tariff by 30 paise per unit for the current financial year, resulting in an average increase of 3

Bengaluru The Karnataka government on Wednesday increased the electricity tariff by 30 paise per unit for the current financial year, resulting in an average increase of 3.84%.

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The decision has come under sharp criticism from all quarters, questioning the timing of the increase when the Covid-19 pandemic-induced lockdown has affected livelihoods and all businesses alike.

“The electricity supply companies (ESCOMs) had sought an average increase of 135 paise per unit accounting for 17.31% increase,” according to a statement by the Karnataka Electricity Regulatory Commission (KERC) on Wednesday.

“The revised retail supply tariff includes the revised transmission tariff to be payable by ESCOMs to KPTCL for Financial Year 2021-22,” the statement added.

The revised tariff will come into effect for electricity consumed from the first meter reading date falling on or after April 1, the government added.

“ However, to soften the burden of increase in tariff on the consumers, during the prevailing lockdown in the state, the arrears towards revision of tariff for the month of April 2021 and May 2021 is ordered to be recovered during the month of October 2021 and November 2021 respectively, without charging any interest,” the KERC added.

Karnataka is among the worst Covid-19 impacted regions in the country. The government said that the order was delayed due to by-elections as well as other polls for city municipal corporations and other urban local bodies earlier this year. The government added that it delayed its order dated April 4, 2020 in view of the adverse financial situation prevailing among all the sectors of economy due to the pandemic.

The statement said that an approved discounted rate scheme, wherever there is power surplus, large industries, commercial will be at a discounted rate of ₹6 per unit.

“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,” the government said.

“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 annual performance review (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,” the government added. It added that input costs towards operations, maintenance and borrowings for capital expenditure were also increasing each year.

“Hence, in order to enable the ESCOMs to carry on their business of supplying the electricity, which is the basic need of the society, the increase in the tariff has become inevitable”, the government added .

The government said that the total revenue gap assessed for financial year 2022 including the gap for FY 2020, regulatory assets created during the FY20 due to the reasons explained above, is Rs. 1,819.38 crores, which has to be recovered as revenue gap to be filled by tariff revision from 1st April 2021 to 31st March 2022.

The fixed charges will also be raised by ₹15, the government added.

“If they hike 35 paise, then it will add 9% tax. Already there is no business for two months (this year) and nearly six months were lost last year due to lockdowns. Our overheads will be more, there will be no financial liquidity and no orders. The government has to give discounts. No other state has increased power tariff at this time,” Perikal M Sundar, the president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) told Hindustan Times.

Most businesses are shut in Karnataka and other parts of the country where similar restrictions have been imposed to contain the pandemic.

Sundar said that it was “unfortunate” that the state decided to increase tariffs despite industry bodies like the FKCCI making representations to the government, requesting not to announce any hikes. He said that the industry body strongly objects to the hike and that it will reach out to the chief minister and seek withdrawal of the new changes.

Yediyurappa on 2 tranches, had announced ₹1,750 crore financial package to several sections of people hardest hit by the pandemic but barely provided any relief as select individuals who have lost months of livelihood were entitled to a one-time payment of ₹2000- ₹5000, HT reported.

As part of the relief, Yediyurappa had announced concessions for MSME industries for paying fixed charges for the month of May/June and for other industries payment will be extended till 30.07.2021. The said relief would cost the state exchequer ₹120 crore, the chief minister said.

“The decision of @CMofKarnataka to increase electricity tariff is disastrous for everyone. Common man to industries, all are suffering due to pandemic and the increase will kill everyone,” Siddaramaiah, former chief minister and Congress’ leader of the opposition tweeted.

“K’taka has surplus power & yet @BJP4Karnataka continues to purchase power from Central grid, Adani & others at higher cost. Price for which our people have to pay. It’s unfortunate that K’taka CM @BSYBJP cannot keep his head high in front of @narendramodi &Adani,” he added.