Kerala: Power rate may be hiked after bypoll

THIRUVANANTHAPURAM: Power minister M.M. Mani is dead against a tariff hike but the Electricity Regulatory Commission might allow a new tariff rate that will fetch KSEBL additional revenue of Rs 225 crore. Only BPL consumers with monthly consumption of up to 40 million units and agricultural consumers will be spared. However, the proposed hike of 3.6 to 8.7 percent, which could translate into a 20-30 paise per unit hike in tariff, is not as harsh as in 2014 when there was a 15-70 percent hike. The hike is expected to be announced after the Malappuram bye-election on April 12.

KSEB Limited, though it had not directly sought a tariff revision, has made its case on the basis of three arguments: one, 2016-17 had witnessed the lowest ever inflow into reservoirs (the present storage in reservoirs can generate only 10 million units a day when the average daily demand is 72.7 MU); two, severe congestion in the inter-regional corridor, rendering even the evacuation of contracted power uncertain; three, as a consequence the utility will be forced to resort to costly power, at over '7 per unit, from naphtha and diesel stations like NTPC Kayamkulam and Brahmapuram.

In an unprecedented move, the ERC had earlier suo motu prepared the annual revenue requirement of KSEBL for 2016-17 and 2017-18. The power purchase requirement was calculated as Rs 7,186 crore (2016-17) and Rs 7,091.09 crore (2017-18). KSEBL’s director (finance) N.S. Pillai said the ERC had seriously underestimated its revenue requirements. According to him, the revenue requirements for 2016-17 and 2017-18 would be Rs 8423.31 crore and Rs 7966.95 crore respectively. He also said that the utility's unbridged revenue gap was double (Rs 10,791.05 crore) the ERC’s estimate of Rs 5,543 crore. Power minister M.M. Mani, however, maintained that a tariff hike was not in the cards.