The Kerala State Electricity Board (KSEB) on Thursday filed a petition before the Kerala State Electricity Regulatory Commission (KSERC) virtually seeking a second tariff revision within a matter of two months.

Only in July the commission had issued a tariff order permitting the KSEB to increase the tariffs across the board to net an additional revenue of Rs.1,676.84 crore annually from the power consumers. This tariff hike had nearly bridged an annual revenue gap of less than Rs.1,900 crore the KSEB had projected in its budget for 2012-13 presented before the commission at the start of the year.

‘Regulatory asset’

The commission’s order was that any small gap still left in the accounts would be attended to in the years immediately following. The commission refers to it as ‘regulatory asset,’ something that will be carried forward in the accounts to be recovered through any further revenue mobilisation effort in the future.

Thus, the revenue gap that was projected at the start of the year was more or less attended to by the tariff hike in July. The upward revision had come to more than 30 per cent. The new petition now filed by the KSEB, for instance, proposes putting a cap on the electricity that would be available to the domestic consumers at the existing tariff and charging a high rate for the energy used above the ceiling fixed.

200-unit ceiling

The ceiling proposed is 200 units a month. This means that a very large number of upper middle class families would be subjected to what is actually a tariff hike. The KSEB’s statistics show that the number of consumers affected would come to around 1.5 lakh.

‘Virtual tariff hike’

The same ‘virtual tariff hike’ will become applicable for industries also since the KSEB’s new petition is seeking permission to employ a split tariff system for them—normal tariff for 75 per cent of the usual consumption and a high tariff for the remaining part of the energy used.

The KSEB, in its accounts at the beginning of the year, had projected the total demand for energy during the year at a little over 17,000 million units. With the tariff hike allowed in July, revenue realisation from a unit of electricity sold by the KSEB would work out to Rs.4.64. The poor performance of the monsoon is seen to have set the KSEB back by around 1,200 million units of cheap hydro power.

Simple calculations will show that even if the KSEB has to buy expensive power from outside to make good the shortage of around 1,200 million units of hydro power to satisfy the expected demand for power in the State during the year, the average per unit cost of the electricity supplied by the KSEB will only be in the region of Rs.5.

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