CESC seeks hike of ₹1.44 a unit to deal with ₹1,005 cr. deficit

The associations representing industries and consumers on Wednesday strongly opposed the Chamundeshwari Electricity Supply Corporation’s move seeking an average hike in tariff of ₹1.44 a unit for all categories of consumers for dealing with the revenue deficit of ₹1,005 crore the Corporation has expected to undergo for the financial year 2021-22.

The CESC submitted its tariff revision proposal to the Karnataka Electricity Regulatory Commission (KERC), which held a hearing at the Deputy Commissioner’s office here seeking the opinions from the general public and various stakeholders such as industries, associations and others, to the CESC’s move.

KERC Chairman Shambhu Dayal Meena presided over the public hearing. Members M.D. Ravi and H.M. Manjunath were present.

CESC Managing Director Manohar M. Bevinamara made a PowerPoint presentation to the Commission on why the CESC was seeking the revision and also shared details on its performance, new initiatives and measures taken for minimising T and D losses and so on.

The MD said the CESC, which has its jurisdiction spread across Mysuru, Mandya, Chamarajnagar, Hassan and Kodagu districts, was in need of a revenue of ₹6,024.12 crore for its outlays but it was expecting a revenue of ₹5,019.12 crore from consumers, resulting in a deficit of ₹1,005 crore.

The CESC had sought a hike of 63.32 paise per unit to overcome the deficit of ₹475.50 crore in 2020-21. In 2019-20, the CESC had sought a hike of 99 paise. In the last two years, the CESC’s shortfall has been on the rise, prompting the management to seek a higher revision when compared to the last two years.

Mr. Bevinamara urged the Commission to approve its proposal for increasing the tariff by ₹1.44 a unit, including the fixed costs, to deal with the shortfall.

According to the CESC’s estimates, the cost incurred by it for power purchase would be ₹4,206.93 crore (projected for 2021-22). In 2020-21, cost of ₹3,611.91 crore was incurred for power purchase.

The KIADB Industrial Area Manufacturers’ Association raised its strong objections to the proposal, after the MD concluded his presentation. Vice-President K .Ravindra Prabhu described the proposal as “anti-industry”, “anti-people” and unwarranted. He urged the chairman to reject the proposal outright.

He said the CESC has proposed to purchase power at an exorbitant price of ₹8.51 to ₹12.81 per unit from its own and Central government power generating companies.

“If the revision is approved, it will result in largescale closure of small scale industries which are already in a crisis,” he argued.

The Mysore Industries’ Association represented by former MLA and MIA President Vasu and Secretary Suresh Kumar Jain and KASSAI also urged the Commission to reject the CESC’s proposal.

“The proposed hike is unjustified at least in the case of small scale industries (LT 5 and HT 2 categories) because of load-shedding and unscheduled interruptions, causing loss of man hours and loss of production. The survival of the SSIs in this competitive world is at stake and the SSIs’ sector may collapse further in case of a hike as sought by the CESC,” said KASSIA in its objections.

In fact, reduction in power tariff is needed to ensure the survival of energy-intensive units such as foundries, forging shops, heat treatment shops, blow moulding units, and steel industries, it stated.

There is scope for reducing overheads and improving efficiency and therefore the hike should be rejected, it said.

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Printable version | Apr 19, 2021 7:35:11 PM | https://www.thehindu.com/news/national/karnataka/cesc-seeks-hike-of-144-a-unit-to-deal-with-1005-cr-deficit/article33862602.ece

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