The power tariff revision cleared by the Kerala State Electricity Regulatory Commission on Monday may prove to be a twin-edged sword for the State government.
The government would have to face the ire of the 85 lakh domestic consumers who are being forced to bear the brunt of the tariff hike and also heed the complaints of the Kerala State Electricity Board that the revision sanctioned is grossly inadequate to clear its liabilities, mainly repayment of a loan liability of ₹1,400 crore.
Hard on households
Power consumption in the domestic sector is bound to increase in the summer months of April and May and it will reflect in the household budgets too. This will eventually lead to a groundswell of protests against the government.
Board sources told The Hindu here that the ground realities regarding the power sector furnished by the board, especially its financial position, were not duly considered before finalising the tariff. The tariff had been finalised on the basis of a regulation issued in 2014, without considering the actual expenditure of the board. The board had challenged the regulation at the High Court, but a final order had not yet been issued, sources said.
Since hydroelectric generation was deeply affected by rain shortage the board had to expend ₹1,000 crore from its coffers for sourcing 4,000 mu from exchanges to meet the deficit in generation and also to avert a power cut and load-shedding. The cascading effect of the drought has impacted the second half of the previous financial year and is bound to prevail till the monsoon sets in by June.
Struggling for subsidy
The government will have to offer subsidy to the board to ease the tariff burden of the domestic consumers and also take over the loan liability of the board. But the current financial position of the government does not offer the leeway to take such adventurist decisions.
The Centre had offered a scheme to take over the 75% loan liability of the board under the Uday scheme. Though the scheme offers the freedom for long-term repayment, the State government has not accepted it due to resource crunch. Hence, it would not be able to step in to save the board from the current crisis. This situation would bring the government under fire from the board as well as the domestic consumers, sources said.
