Karnataka - Bangalore   

KPTCL to challenge KERC’s tariff order

B.S. Satish Kumar

‘Finances of KPTCL will be hit if it is implemented’

BANGALORE: Karnataka Power Transmission Corporation Limited (KPTCL) has decided to challenge the transmission tariff order of Karnataka Electricity Regulatory Commission (KERC) before the Central Appellate Tribunal for Electricity.

Confirming this, KPTCL Managing Director Bharatlal Meena told The Hindu said the financial health of KPTCL would be affected if the transmission order of the KERC was implemented.

KPTCL has filed a petition before the KERC demanding that its transmission tariff be increased from 19.42 paise per unit to 32.64 paise. However, the KERC has decreased the tariff to 17.48 paise per unit.

Under the Multi-Year Tariff regime, the KERC has effected further reduction in tariff for the coming years by prescribing a transmission tariff of 14.80 paise per unit for 2008-09 against the 33.54 paise sought by KPTCL. Similarly, for 2009-10, a transmission tariff of 14.12 paise has been fixed against the 40.19 paise sought by KPTCL. In the order, the KERC has reduced the Annual Revenue Requirement (ARR) of KPTCL from Rs. 1,351.63 crore to Rs. 723.73 crore for this financial year. Similarly, for the next two years, the KERC has approved an ARR of Rs. 666.96 crore and Rs. 695.52 crore against the KPTCL’s proposal of Rs. 1,511 crore and 1,979.54 crore.

Mr. Meena said most of the works of KPTCL, especially the system improvement work being taken up in a big way to strengthen transmission infrastructure, would be affected if the new tariff was implemented.

Sources said that KPTCL’s work to upgrade its network in tune with the increase in power load would be hampered. The inadequate power network was resulting in overloading and interruptions in power supply in many areas, including parts of Bangalore. Hence, the power network in such areas was being upgraded. In fact, KPTCL had taken up a programme to strengthen the power network in Bangalore urban and rural districts at a cost of Rs. 1,200 crore to cater to the increasing demand for power, especially by industries. Now, the sources said, the system augmentation work in Bangalore urban and Bangalore rural districts would also be affected if the new transmission tariff was implemented.

KPTCL is also concerned that the new tariff might affect its debt servicing and operation and maintenance. Because, the proposal of KPTCL regarding O&M expenses, depreciation, advance against depreciation, interest and finance charges have been reduced by over Rs. 700 crore for this financial year itself.

The fear in KPTCL is that it might be difficult for the corporation to get fresh loans from financial institutions owing to its poor financial health.

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