The Hindu : Karnataka / Bangalore News : KERC cuts tariff for Hescom consumers

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Monday, Jan 21, 2008
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Karnataka

Karnataka - Bangalore

KERC cuts tariff for Hescom consumers

Special Correspondent

The reduction will come into effect from February 1

The reduction is 5 to 35 paise per unit
Seven districts come under Hescom jurisdiction

BANGALORE: The Karnataka Electricity Regulatory Commission (KERC), which is on a spree of power tariff reduction, has now reduced the tariff for Hubli Electricity Supply Company (Hescom) consumers by 5 to 35 paise a unit.

This marginal tariff reduction will come into effect from February 1 for the Hescom which comprises the seven districts of Dharwad, Haveri, Uttara Kannada, Gadag, Belgaum, Bagalkot and Bijapur. The reduction in tariff for Hescom comes close on the heels of reducing the tariff for the Bescom and Gescom consumers.

But despite this reduction exercise, the tariff for Hescom consumers is on a marginally higher side when compared with their Bescom counterparts. However, the new tariff structure of the Hescom is similar to that of the Gulbarga Electricity Supply Company.

While the availability of large quantum of cheap hydel power has been cited as the main reason for tariff reduction, the tariff for the rural areas has been further reduced to compensate for the poor quality of power supply in the villages.

According to the tariff order issued by the three-member quasi-judicial KERC, headed by K.P. Pandey, the tariff for domestic consumers in urban areas has been reduced by 10 paise a unit while their rural counterparts have been given a reduction of 5 to 20 paise a unit.

The tariff for the Bhagya and Kutir Jyothi consumers has been reduced by 25 paise a unit while the solar rebate has been increased by 10 paise from the present 40 paise a unit (subject to a maximum of Rs 50 per month).

It also continued the special incentive scheme for the High Tension consumers at a reduced rate of Rs. 3.55 per unit as against the present tariff of Rs. 3.80 per unit.

The Hescom had proposed a tariff increase of 90 paise per unit for all the consumer categories, barring Bhagya Jyothi, Kutir Jyothi and irrigation pump sets. With such a proposal, the Hescom wanted to raise an additional revenue of Rs. 202.25 crore still leaving a revenue deficit of Rs. 324.83 crore.

But the commission, which heard the views of consumers and experts, did not grant the hike.

The KERC, which undertook a truing-up exercise of the financial details of Hescom for the period 2002-03 to 2005-06, found a surplus revenue of Rs. 299.87 crore which has been spread and adjusted with the revenue requirement for the next three years. This also contributed towards the tariff reduction.

The commission approved an annual revenue requirement of only Rs. 1,844.19 crore for the period 2007-08 as against Rs. 2,282.62 crore sought by Hescom.

The major difference was in the respect of power purchase cost as the commission approved energy sales of Rs. 1,381.03 crore as against the proposed Rs. 1,649.60 crore.

After granting the approval for such a revenue requirement, the average cost of supply in Hescom would be Rs. 3.30 per unit for 2007-08 as against the present level of Rs. 3.56 per unit.

However, the cost of supply would touch Rs. 3.75 and Rs. 3.98 per unit in 2008-09 and 2009-10 respectively.

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