Electricity Regulatory Commission divided over KSEB losses; tariff hike looms

THIRUVANANTHAPURAM: The Electricity Regulatory Commission, in a divisive order issued on March 16, has approved a revenue gap of Rs 1386.97 crore for KSEB in 2011-12, considerably more than the Rs 928.61 crore originally approved by the ERC for the fiscal. A heavier loss burden will come in handy for KSEB to seek a tariff revision, which looked unnecessary at a time when transmission constraints have been eased and the storage position has revived. However, the ERC chairman T.M. Manoharan has struck a note of dissent saying that the Commission’s order “was neither in the interest of consumers nor KSEB.”

The ‘truing-up’ or the final accounts of 2011-12 and 2012-13 had not been submitted by KSEB as it had objections to the ERC’s terms of reference. The latest approval comes after an Appellate Tribunal for Electricity (APTEL) order asking the ERC to go ahead with the truing up. Sources said the ERC would favour a wider revenue gap for KSEB for 2012-13, too. “This will bloat KSEB’s loss figures and would make a compelling case for tariff revision,” the source said.

The ERC chairman was especially critical of the decision of the other two members to approve the higher employee cost claimed by KSEB. (KSEB had claimed Rs 1903 crore and the ERC has approved Rs 1822 crore. But the originally approved figure was Rs 1582.11 crore.) He has argued that unlike generation or power purchase cost, employee costs are controllable. "The increase in employee cost approved by the ERC members on truing up of accounts appears to be on the higher side when compared to the increases claimed and approved in the truing up processes relating to the financial years prior to 2011-2012,” Mr Manoharan said.