Nation Other News 18 Jan 2017 Kerala State Electri ...

Kerala State Electricity Board seeks hike in power tariff after two years

Published Jan 18, 2017, 1:09 am IST
Updated Jan 18, 2017, 7:06 am IST
Only BPL consumers with monthly consumption of up to 40 million units and agricultural consumers will be spared.
Kerala State Electricity Board
 Kerala State Electricity Board

THIRUVANANTHAPURAM: Hours after power minister M.M. Mani said that the government had not considered a tariff hike, KSEB Limited has officially sought an upward revision of tariffs from the Electricity Regulatory Commission on Tuesday. The last tariff hike was in August 2014. The public utility has based its plea on three major 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 Rs 7 per unit, from naphtha and diesel stations like NTPC Kayamkulam and Brahmapuram.

KSEBL’s director (finance) N.S. Pillai, while presenting the utility’s case during the public hearing held by the ERC here on Tuesday, also argued that the Commission had seriously underestimated its revenue requirements. 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). The KSEB director said it would be Rs 8,423.31 crore (2016-17) and Rs 7,966.95 crore (2017-18). 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.

“KSEBL has no revenue source other than tariff income,” Mr Pillai said. He said the utility’s power purchase plans had gone awry. The short-term open access (STOA) for 200 MW will not be available, he said. A medium-term contract for 200 MW has yielded just 85 MW, but even that had to be arranged by paying additional transmission charges. The tie-ups from power traders in North, where there is a power surplus, did not work out because of the non-commissioning of two major north-south lines: Angul-Srikakulam-Vemagiri line and Wardha-Nizamabad line.

Contracting power from the southern grid is also not possible mainly because the Centre’s guidelines prohibit region-wise purchase. There is no power available either. “Already the southern states together have bid for 2,400 MW when the availability is just a meagre 600 MW,” Mr Pillai said. The ERC, on its part, had proposed 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 per cent is not as harsh as in 2014 when there was a 15-70 per cent hike.

Location: India, Kerala


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