The Kerala State Electricity Board (KSEB) has expressed strong reservations about several key proposals in the draft regulations for determining power tariffs published by the Kerala State Electricity Regulatory Commission (KSERC).
Some of the proposals are open to misuse and could drag the KSEB into court cases at a later stage, the board noted, presenting its views on the KSERC (Terms and Conditions for Determination of Tariff) Regulations, 2021, at a public hearing on Wednesday.
Objecting to the move to introduce non-uniform retail supply tariffs for consumer categories under different distribution licencees, the KSEB said the present system of uniform tariffs is in line with the Tariff Policy. It was implemented in 2012 after detailed deliberations. Non-uniform retail tariffs would adversely impact the cross-subsidy mechanism and, ultimately, lead to tariff hike.
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If at all non-uniform tariffs are adopted, the cross-subsidy content in the tariffs of consumer categories should be kept uniform, the KSEB said.
Surplus electricity
The KSEB has also opposed the draft proposal which says that the commission can allow the licensee (KSEB) to sell surplus electricity to its consumers instead of selling it in the open market or power exchanges. The proposal, according to the KSEB, is fraught with operational and legal issues.
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The KSEB also stands to lose around ₹ 100 crore (at ₹ 2 per unit) through the loss of open access charges. Further, it would also lose additional revenue from the sale of surplus power in the market.
Further, the KSEB has also expressed concern over the move to use the ‘Average Power Purchase Cost’ rather than the ‘Average Pooled Cost of Power Purchase’ (which includes KSEB’s own generation cost) for purchasing the excess energy injected into the system by a renewable energy ‘prosumer.’ According to the KSEB, the additional liability to the KSEB will be to the tune of ₹1.10 to ₹1.15 per unit.
Industries hail it
Meanwhile, the HT-EHT Industrial Electricity Consumers Association welcomed the proposal for non-uniform retail tariffs and the proposal on surplus sale of power, terming them “'progressive.”
Non-uniform tariffs will reflect the true operational and financial efficiencies of distribution licencees, the association said. Neither the Electricity Act 2003, nor the national tariff policy requires the tariffs to be uniform. In the case of surplus power sales, the association urged the Commission to help put together a workable plan for a win-win situation for both consumers and the KSEB.
Employees’ organisations in the KSEB, including the KSEB Officers’ Association, KSEB Workers’ Association, the Kerala Electricity Employees Confederation and the Kerala Electricity Officers’ Confederation also objected to several of the proposals saying they appear to promote privatisation.