The proposed hike in power tariff sought by the Chamundeshwari Electricity Supply Corporation (CESC) has riled local industry bodies, which are yet to recover fully from the slowdown due to demonetisation.
The CESC has sought a hike of ₹1.48 a unit across all categories of consumers on the grounds that there is a mismatch between revenue and expenditure. According to the CESC projections, the deficit for 2017-18 is expected to be ₹962.93 crore, with the revenue receipts projected at ₹3,685.5 crore, as against the projected requirement of ₹4,648.43 crore.
The CESC balance sheets of the previous two years also indicate a revenue deficit of ₹456.54 crore in 2015-16 and ₹197.73 crore in 2016-17. Justifying its decision to seek a hike from the Karnataka Electricity Regulatory Commission, the CESC has argued that the average cost of power supply is more than the average rate of realisation.
During 2015-16, the average cost of power supply per unit was ₹6.13, but the CESC realised only ₹5.28. The average cost during 2016-17 has been pegged at ₹5.94, as against the rate of realisation of ₹5.62. But 2017-18, the CESC has projected the average cost of supply per unit at ₹7.14, as against an average rate of realisation of ₹5.66 — a deficit of ₹1.48 a unit.
The CESC has also sought revision of the fixed charges for various categories of consumers to bridge the deficit.
Filing objections
However, the Mysore Industries’ Association and other bodies are racing against time to file their objections before the deadline — February 4.
MIA general secretary Suresh Kumar Jain said frequent hikes in tariff affect all consumers but particularly the industry as it would add to their operational cost overheads and make them less competitive. “Though the established industries by and large escaped the impact of demonetisation, the micro and small-scale units who favoured cash transactions were definitely affected. Now they have to absorb the power shock,” he said.
One of the key objections of industry bodies is to the government’s tendency to cross-subsidise different categories of consumers. They said the difference in amount due to cross-subsidisation is always passed on to the industries, which are already feeling the brunt of the economic slowdown. Instead, they believe the government should bear the cost of cross-subsidisation.
