Karnatka Power tariff hike on cards
Review of regulator's order being sought.

B.S. Satish Kumar

Bangalore, Feb. 24

Another tariff hike seems imminent in the State. The State Government is learnt to have directed the electricity supply companies (ESCOMS) to file a petition before the State power regulator, seeking a review of its tariff order issued in 2009.

According to sources, the Government has sent fax messages to all the five companies asking them to file the review petition.

The Government, it is reliably learnt, is of the view that the subsidy component fixed by the Karnataka Electricity Regulatory Commission (KERC) is very high, and wants the ESCOMS to seek a reduction in the subsidy to be given by it.

Tariff hike

According to experts in the power sector, seeking a reduction in the subsidy component is nothing but an indirect way of asking for a tariff increase.

If the KERC accepts such a plea, then there is a likelihood of higher tariff for some sections of consumers.

Power sector observers fear that any such increase in tariff to irrigation pumpsets at a time, when the farmers are already protesting against acquisition of their farmlands may lead to unrest among farming community in the State.

There are concerns over such a move within the ruling Bharatiya Janata Party also as it has come at a time when the panchayat elections are round the corner.

Additional Subsidy

In its tariff order, the KERC had asked the Government to pay an additional subsidy of about Rs. 1,348 crore in addition to the already committed subsidy component of Rs. 2,080 crore to ESCOMS for 2009-10.

It had also asked the Government to pay subsidy of Rs. 2,574 crore towards the financial years of 2007-08 and 2008-09.

The five companies had sought a tariff hike of about 51 paise a unit. However, the KERC had, in its tariff order issued on November 25, 2009, granted an average hike of 34.16 paise a unit which roughly works out to a hike of about 7.5 per cent.

The hike has been implemented with effect from December 1.