The Power department will seek legal advice before deciding on the course of action for implementing the Electricity (Amendment) Rules, 2022, notified by the Centre, Minister for Electricity K. Krishnankutty has said.
Mr. Krishnankutty on Tuesday held discussions with the senior officials of the department and the Kerala State Electricity Board (KSEB) on how best to implement the rules without burdening the consumers.
The discussions centered around whether consumers can be compensated with small reductions in tariff during those months when power purchase costs of the KSEB are at its lowest.
Rule 14 of the Electricity (Amendment) Rules, 2022, empower power distribution companies to automatically recover their additional power purchase expenses on a monthly basis from the consumers. Kerala opposed the move saying that distribution companies may ‘‘generate undue advantage’‘ from this arrangement.
The Union Power Ministry notified the rules on January 4.
The rules state that the State Electricity Regulatory Commission should, within 90 days of the publication of the rules, specify a price adjustment formula for the recovery of the costs on a monthly basis.
Kerala vehemently opposed the rules as they sought to replace the system of computing the thermal fuel surcharge, periodically imposed by licencees (the KSEB, in Kerala’s case) on electricity bills. In the earlier scenario, the surcharge was fixed by the regulatory commission after studying the petitions filed by the KSEB on a quarterly basis and after holding public hearings.
This system will be replaced with an annual ‘‘truing up’‘ by the commission. The surcharge will be collected automatically on a monthly basis.
The amendments will lead to an ‘unstable pricing situation’ in the power sector akin to the one in the petroleum sector, subjecting electricity consumers to frequent price fluctuations, Kerala informed the Centre in September last year.
