The Hindu : Karnataka / Bangalore News : KERC ready to allow differential power tariff from this year

Online edition of India's National Newspaper
Thursday, Mar 23, 2006

Karnataka

Karnataka - Bangalore

KERC ready to allow differential power tariff from this year

Special Correspondent

`Differential tariffs are already hidden in the system'

Bangalore: The Karnataka Electricity Regulatory Commission (KERC) may rethink on approving a differential power tariff for electricity supply companies (Escoms) from this year.

The KERC was prepared to implement differential tariff systems from last year, but dropped the move after protests from electricity users. If implemented, it would have allowed a company such as the Bangalore Electricity Supply Company with a larger customer base and better profits, charge a lower tariff or at least confine any increase within limits unlike say, Gulbarga Electricity Supply Company, which has much lower profitability.

The opposition from electricity users and consumer organisations was that differential tariff will benefit those in the larger urban centres where better quality supply is available.

KERC Chairman K.P. Pandey has said there will be a fresh look at the proposal. "Although differential tariffs are hidden in the existing tariff structure, KERC wants to make it more transparent to users," he said.

He cautioned the Escoms that the scope for increase in tariffs for different types of consumers, especially those with industrial load, was low in view of the "open access system" in a phased manner.

From next month, high tension (HT) consumers with energy demands of over 5 MW will come under the new system under which they can draw from electricity supply companies which offer a lower tariff. "Although the open access system was introduced one year ago, it has received poor response with only one HT consumer, the Kalyani group, opting for it," he said. Explaining how differential rates are now not visible in the existing tariff, Mr Pandey pointed out the example of BESCOM which was not getting a subsidy for irrigation pump sets as other companies were.

If at all, BESCOM received such a subsidy there was every possibility of its consumers getting power at a lower tariff. BESCOM's subsidy share is currently distributed to the other power supply companies. For the current year, the state government approved power subsidy of Rs. 1,700 crores and this is likely to go up to over Rs. 2,300 crores in the coming fiscal year, he added.

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