It took everyone by surprise when the Karnataka Electricity Regulatory Commission (KERC) granted the Bangalore Electricity Supply Company’s petition to impose tariffs different from other electricity supply companies (Escoms) for domestic consumers. But if the power utility has its way, this may well be the way forward for all categories of consumers, including commercial establishments.
Bescom is serious about filing petitions for tariff revision separate from the other Escoms to the KERC from the next financial year. A team has been formed under Bescom’s director (finance) to conduct a study on how Escoms in large metropolitan cities such as New Delhi and Mumbai file their tariff revision petitions.
The KERC agreed to Bescom’s proposal to introduce differential hikes for different consumption levels in its order on Tuesday.
Why it is needed
Explaining the need for different tariffs, Bescom managing director P. Rajendra Cholan said the utility’s consumers are different from those of other Escoms. “While around 60% of the electricity goes for irrigation pump (IP) sets under other Escoms, only 20% of ours goes towards IP sets. The remaining are metered consumers,” he said.
In addition, Mr. Cholan said, Bescom, which uses roughly half the power in the State, has to be treated differently given its high power purchase costs. “We cater to around 90% of industries. With the dip in availability of hydro-electricity, we have to end up making short-term power purchases, which is high cost power. Power purchase accounts for a majority of our expenditure,” he said.
Different and higher?
Will “different” tariff also mean higher tariff for Bescom consumers? R.C. Chetan, CFO and director (finance) of the company, is not ruling that out.
“We have time till December to ready our proposal. We will be visiting utilities in other metros and see what suits us best. The KERC does not allow us to make a profit. So, it will be the same or lower than the metro cities. Ultimately, we are looking to optimise our returns and provide uninterrupted power supply to consumers,” he said.
For the current fiscal, Bescom, which had originally submitted a petition similar to the other Escoms, filed an amended one in the last minute. The KERC, which recommended an average 48 paise increase in tariff, allowed the introduction of additional slabs in the domestic category for urban areas under Bescom. According to this, the tariff hike will increase as consumers cross the various consumption slabs.
