As Karnataka gears up for Assembly elections, both the ruling Bharatiya Janata Party (BJP) and the Opposition Congress have made big promises regarding electricity, ranging from free power up to a certain number of units, to lower tariffs.
It all started when the State’s Energy Minister, V. Sunil Kumar, in December 2022, announced a “reduction” in tariffs from January 2023, in the range of 70 paise to ₹2 per unit. This led to some confusion, as the tariff revision has a set timetable, which has been disrupted only by elections and the pandemic in the recent past. The power utilities have to submit their revision petition to the Karnataka Electricity Regulatory Commission, which in turn calls for a public hearing, which is usually held in February, before they finally announce the revised tariffs for the new financial year. With the Minister’s announcement, many wondered how this was possible towards the last few months of the financial year. It then turned out that the FAC (fuel adjustment charges) for that quarter, a routine fixture, would reduce.
The Congress was then quick to announce that it would offer 200 units of power free to every household every month if voted back to power — a move reminiscent of the Aam Aadami Party’s decision in Delhi. Mr. Kumar responded that this would destabilise the functioning of State electricity supply companies (Escoms), and claimed that the people were not asking for free power but quality and uninterrupted power supply.
Amidst all this, the tariff petition by the Bangalore Electricity Supply Company (Bescom) showed that it had indeed proposed to reduce energy charges per unit for the first slab of consumers who use the least amount of power. However, the power utility has also proposed big hikes in the fixed charges, which, many say, nullifies the lower energy charges. But the proposal to reduce energy charges is a marked departure from the power utility’s tariff revision petitions in at least a decade. Electricity consumers have had to bear with an increase, though not commensurate with the demand of the utilities, year on year.
Stakeholders in the sector have questioned the plans of both these political parties. Karnataka, which for years struggled to balance its power demand and supply, has now emerged as a power-surplus State, winning accolades especially in the renewable sector. However, uninterrupted power supply remains a challenge. Unscheduled power outages, especially during the rains, continue. This was a severe problem during the pandemic years when lakhs of employees were forced to work from home. Infrastructural challenges are constantly cited as a reason for this.
Citizens and industry have also been questioning the rationale behind the steady upward revisions in power tariffs. Many have raised objections to paying a higher price for the same quality of power, though the Escoms have maintained that quality has improved over the years. In the Ministry of Power’s 10th Annual Integrated Rating and Ranking of power distribution utilities, of 52 state and private distribution utilities, the Bangalore Electricity Supply Company Limited and Gulbarga Electricity Supply Company Limited were at the lower end, with a -C rating.
Citizens have also raised questions about Escoms quoting higher power purchase costs as a reason to demand higher tariffs when Karnataka claims to be a power-surplus State.
In the light of all this, those familiar with the power sector ask how political parties make such tall promises. One section points out that the promise of free power would make end users complacent about conserving energy. Another section demands to know how the Escoms and the State exchequer will deal with the cost of providing power for free or at a lower cost when they are already reeling under expensive, long-term Power Purchase Agreements, subsidised power supply, and transmission and distribution losses.
Incidentally, the Gurucharan Committee, set up to recommend restructuring of the State’s power sector and advance second generation distribution reforms, submitted its report to the Chief Minister in June last year. It identified flight of High Tension consumers due to exorbitant tariffs, high power purchase costs, inefficiencies in operation, free power supply, unmetered/unbilled energy and inequitable tariffs as some of the constraints and challenges in the power distribution business.
