KERC increases tariff by an average of 30 paise per unit

People will have to pay more for electricity as the Karnataka Electricity Regulatory Commission (KERC) has approved an average increase in tariff by 30 paise per unit for all electricity supply companies (Escoms) for the ongoing financial year.

According to the commission, the revision is an average increase of 3.84%. The Escoms had sought an average increase of ₹1.35 per unit accounting for 17.31% increase.

The revised tariff will come into effect for electricity consumed from the first meter reading date falling on or after April 1 this year to “enable recovery of the revenue gap determined by the commission.”

“However, to soften the burden of increase in tariff on consumers during the prevailing COVID-19 lockdown, the arrears towards revision of tariff for April and May is ordered to be recovered during October and November respectively, without charging any interest,” the commission has said. Defending the increase, KERC has said it was necessitated owing to a variety of factors, including the regulatory asset created by the commission in its 2020 order owing to the delayed issue of tariff order for the previous financial year (11.89 paise per unit).

The tariff revision was announced in November owing to the pandemic and the KERC announced that it will not be implemented retrospectively.


Instead, it had announced the creation of a regulatory asset for the period to be recovered from consumers in two equal installments during the financial years of 2022 and 2023.

“The remaining increase (12.64 paise per unit) is towards overall increase in the operational costs of Escoms, which includes the approved revenue deficit as per the annual performance review for FY20 and also the increase in the cost of power purchase,” the commission said. The total revenue gap has been pegged at ₹1,819.38 crore.

Fixed cost

While the increase is uniform across Escoms with a marginal differential increase in Bescom areas, the increase in energy charges is 10 paise per unit, and increase in fixed cost ranges between ₹10 and ₹20 across all the categories except Bangalore Metro and battery charging stations for electric vehicles.

The year-on-year increase in fixed cost, a substantial part of which is being recovered through energy charges, is necessitated as the current level of recovery of fixed charges is only 33%, which will now go up to 34.29%.

KERC cited the poll code and COVID-19 as reasons for the delay in tariff revision.

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Sagar Biswas

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