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Shobha gets her wires crossed

Special Correspondent

BANGALORE: Energy Minister Shobha Karandlaje surprised everyone on Wednesday by citing the free power being given to farmers (for irrigation pump sets) as one of the main reasons for the Escoms seeking a tariff hike from the State power regulator.

“Free power supply to farmers and increase in cost of power generation owing to hike in coal costs have resulted in revenue deficits for Escoms. The situation has led them to file tariff petitions seeking a hike of 88 paise a unit,” Ms. Karandlaje told presspersons in Bangalore.

The Minister's statement baffled even senior officials from the power sector as it is known that while increase in power generation costs could be a reason for the revenue deficit, free power supply to farmers cannot as the government reimburses the Escoms for power supplied to farmers.

The free power supply to farmers was a pre-poll promise made by the Bharatiya Janata Party. Power experts too have termed the Minister's statement as “incorrect and against tariff regulations”.

Norms

They pointed out that according to Karnataka Electricity Regulatory Commission (Manner of payment of subsidy by State Government) Regulations-2008, the State Government is supposed to release subsidy in advance to Escoms towards the consumer categories for which it wants to reduce the tariff or provide free power. If there is a delay in release of subsidy, the Escoms are supposed to bill the consumers at a regular tariff rate. “The essence of these regulations is that the financial impact of free power supply — a decision taken by the Government — cannot be passed onto other consumer categories in the form of tariff and that the Government itself has to bear the expenses towards this,” a power expert said.

It is not the first time that the Energy Minister has made such random statements. Just before the elections to zilla and taluk panchayats, the Minister had expressed concern over the KERC increasing power tariff and said that the Escoms would put the hike on hold, though in fact it was the Escoms who had sought such a hike. Interestingly, the revised tariff was promptly implemented soon after the ZP/TP polls.

The five Escoms filed separate tariff petitions before the Karnataka Electricity Regulatory Commission on June 15 seeking a hike of 88 paise a unit to fill a revenue deficit of Rs. 2,567 crore. What has caused concern is that it is the third time in the last two years that the State is witnessing tariff revision process; it was revised in December 2009 and December 2010.

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