Power tariff for all sections of consumers in the State is set to go up steeply soon. The estimates of annual accounts of Kerala State Electricity Board (KSEB) for 2012-13, approved on Saturday with modifications by the Kerala State Electricity Regulatory Commission, show a huge revenue gap of Rs.1,889.15 crore.
The approved estimates put the expected revenue at Rs.6,097.24 crore and expense at Rs.7,986.39 crore. The single largest component of expense is ‘purchase of power,' which, according to the KSEB, will come to Rs.5,659 crore. A stiff dose of tariff hike is indicated to save the power utility from a liquidity crisis.
The average revenue realisation from one unit of electricity now is Rs.3.49. This will have to be increased to Rs.4.64 to bridge the revenue gap. It means the tariffs will have to be increased across the board by nearly 33 per cent to help the KSEB break even.
Subsidy likely
The government might step in with a subsidy to protect low-end domestic consumers, agricultural consumers, and institutions for the poor, from the tariff shock. The KSEB told the commission that it would submit a tariff hike proposal in consultation with the government.
The tariff hike would have been still more severe had the commission accepted the KSEB's accounts without some severe pruning and strict directives to ensure efficiency in demand-side management and bring down transmission and distribution loss.
The KSEB's estimates had pegged its total expenses during the year at Rs.9,638.12 crore and income at Rs.6,397.87 crore, leaving a revenue gap of Rs.3,240.25 crore. Even these estimates were based on the assumption that the commission would permit it to impose 15 per cent restriction in power supply to all categories of consumers. This would have necessitated 51 per cent tariff hike.
Without such a restriction, the KSEB had estimated its expense during the year to reach the Rs.10,540.93 crore and income Rs.6,203.85 crore, leaving a revenue gap of Rs.4,337.08 crore. And that would have necessitated 70 per cent tariff hike.
KSEB's calculation was that if the commission were to allow the power supply restriction proposed, 50 per cent of the consumers would purchase energy beyond the restricted level at a suggested high rate of Rs.11 a unit, thereby bringing it additional revenue of Rs.775.94 crore. But the commission said such a restriction throughout the year was not the correct way to approach the problem.
Public hearing
So the directive is to submit before the commission a proper tariff hike proposal immediately. The commission has fixed public hearing on June 4, 6, and 8 on the tariff petition the KSEB would submit.
