The Kerala State Electricity Board (KSEB) has approached the State Electricity Regulatory Commission (SERC) with an appeal to review the latter’s order earlier this year curtailing its expenses on salaries and pensions.

In its appeal, the KSEB noted that the commission had approved the spending of only Rs.1,803.81 crore on salaries and pensions, whereas the sum required under the head would come to Rs.2,551.50 crore in 2013-14. In other words, the sum approved was 29.30 per cent less than that required by the KSEB.

“In order to limit the employee cost to the approved level, the KSEB has to curtail the dearness allowance now being released to its employees, reduce the pension payments, and [effect a] reduction in the revision of pay already effected [in the institution]. However, it is not possible for a public utility like the KSEB to adopt such drastic steps, which would ultimately end up in employee unrest and legal hurdles,” the petition said.

The commission had “not adopted rational methodology” to calculate the KSEB’s employee cost and was “yet to admit the revision of pay and allowance effected in 2008.” The salary and benefits of the employees were governed by wage settlement agreement between the management and the trade unions as per the provisions of the Industrial Dispute Act of 1956. Also, the Electricity Act of 2003 had made it clear that salaries and benefits of the employees should not be reduced in the name of the reform process in the country’s power sector envisaged by the Act. The KSEB cannot deny pension and terminal benefits to its retired employees. It cannot reduce the number of its employees, especially the technical staff engaged in the power distribution business, who accounted for 70 per cent of the total employee strength, the petition said.

The petition also sought a review of drastic cuts in the KSEB’s expenses on generation of power, purchase of power, and general administration. It noted that while the KSEB had projected a revenue gap of Rs.2,758.67 crore in its commercial operations in the year 2013-14, the commission had calculated that the revenue gap would be only Rs.1,049.91 crore. The commission has posted a public hearing on this petition at its office on October 29.

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