If you are already alarmed by the five hikes in power tariff in the last three and a half years in Karnataka, there is yet another cause for concern. Escoms can now directly pass on any increase in fuel cost to consumers from July 1.
The fuel cost adjustment mechanism, which was cleared by the Karnataka Electricity Regulatory Commission (KERC) in its previous tariff order, has been notified in the State Gazette on March 22.
Explaining how the fuel cost adjustment mechanism works, KERC Chairman M.R. Sreenivasa Murthy told a press conference in Bangalore after the pronouncement of the tariff order-2013 that Escoms could pass on fuel cost increase to consumers only once in a financial quarter. This would mean a maximum of four such fuel cost hikes could be passed on to consumers in a year.
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The Escoms have to take KERC’s permission for increasing or decreasing the tariff by more than 10 paise a unit on account of revision in fuel costs, he said. Of course, all the instances of passing on the fuel costs would be scrutinised by the commission and it would be deducted in the next quarter if the commission finds any discrepancies, he noted.
He made it clear that even after passing on fuel cost increase on consumers, the Escoms would still have the freedom to seek regular annual hikes from the commission. However, sources in the commission said in such cases, the annual hikes would be lesser as the extent of hike granted through fuel cost adjustments would be deducted from those annual hikes.
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The highlight of the tariff order issued on Monday is the commission’s liberal view towards educational institutions and hospitals as they come under the service sector. While educational institutions coming under Low Tension category have been spared from the hike, the tariff for private hospitals and nursing homes under the LT category has been moderated by repositioning them with these educational institutions, from the high-tariff commercial category.
This would mean that LT category of private hospitals and nursing homes in urban areas which were paying a high tariff of Rs. 6.20 a unit for the first 50 units and Rs. 7.20 units for consumption beyond 50 units will now pay only Rs. 5.20 a unit for the first 200 units and Rs. 6.20 a unit for consumption beyond 200 units.
The commission has also created two new categories for educational institutions and hospitals in the High Tension Category, which were earlier positioned in HT commercial/industrial category that paid high tariff. Now the government hospitals/educational institutions and the hospitals/educational institutions run by charitable institutions and aided-organisations will pay only Rs. 5 lakh a unit for the first one lakh units and Rs. 5.50 a unit for consumption beyond that.
Similarly, other private hospitals and educational institutions (under HT category) will pay Rs. 6 per unit for the first one lakh units and Rs. 6.50 for consumption beyond that. They will now be paying 70 paise to one rupee less than before.
Mr. Murthy said the commission had moderated the tariff of private hospitals and educational institutions with the hope that they will pass on the benefit to people using their service.
The commission has also marginally increased the price cap on short-term purchase of power from the present Rs. 4 a unit to Rs. 4.50 a unit.