KSEB hikes power tariff for domestic consumers by 11.4 per cent

Thiruvananthapuram: Three years after the last power tariff hike, the Electricity Regulatory Commission (ERC) has approved an average tariff increase of 6.8 per cent for domestic and industrial consumers.

The highest increase would be for domestic consumers, 11.4 per cent. The increase for commercial consumers will be 3.3 per cent. For high tension industry consumers it would be 6.1 per cent, and for low tension industry, it would be 5.7 per cent.

The new tariff will come into effect from Monday, the ERC chairman Preman Dhinraj told reporters. Both monthly fixed charges and energy charges have been revised upwards.

The increase in the monthly fixed charge of domestic consumers ranges from Rs 5 to Rs 70, first time such an increase has been effected. The range of energy charge increase looks relatively modest, from 25 paise to 40 paise per unit. The monthly bill will approximately increase by Rs 18 for the lowest slab (0-50 units) and Rs 254 (above 500 units) for the highest slab.

The tariff revision is expected to fetch the KSEB an additional revenue of Rs 902 crore during the 2019-20 fiscal. The KSEB wanted an additional mobilisation Rs 1100 crore.

Nonetheless, poor households have been exempted from the hike. There will be no tariff revision for BPL families with connected load up to 1000 watts and having a monthly consumption of up to 40 units; it will remain Rs 1.50 per unit.

BPL families having cancer patients or permanently disabled persons as family members will be allowed to consume up to 100 units a month at the subsidised rate of Rs 1.50 per unit.

How will domestic consumers fare

Nearly 90 per cent of domestic consumers use only up to 250 units, or fall within the first five consumption slabs (0-50, 51-100, 101-150, 151-200, and 201-250). Their energy charge increase will be between 25 and 30 paise per unit. But their fixed charges will increase between Rs 5 and Rs 50 for single phase connections, and Rs 10 and Rs 20 for three-phase connections.

The maximum increase in the monthly bill within these five slabs will be Rs 122, and that too only for households consuming up to 250 units a month. (Those consuming 201-250 units a month form just 8 per cent of the total domestic consumers.) The maximum number of domestic consumers, nearly 30 per cent of them, are within the 101-150 units slab. The increase in their monthly bill will be between Rs 40 and Rs 70.

Telescopic advantage

Up till the 250 units slab, the telescopic tariffs has been retained. Meaning, all the units will not be uniformly charged at the high Rs 7.60 per unit (the new tariff for the 201-250 consumption slab). Instead, the bill amount will be calculated incrementally, using differential rates.

Take for instance a household that had consumed 230 units. The first 50 units will be charged at Rs 3.15 per unit, the next 50 at 3.70 per unit, the next 50 at Rs 4.80 per unit, the next 50 at 6.40 per unit, and the remaining 30 at Rs 7.60 per unit.

However, for households consuming more than 250 units (which constitute just about 4 percent of the total domestic consumers) there will be non-telescopic tariffs. A household with a monthly consumption of, say, 420 units will be uniformly charged Rs 7.10 (the new tariff for households consuming over 400 units) for every unit consumed.

The highest increase in the monthly bill will be Rs 254, which is for households consuming 500 units or more, a category forming just 3.83 per cent of the total domestic consumers. The lowest increase in monthly bill will be Rs 18 for households consuming up to 50 units a month.

Reducing subsidy amount

The average cost of supply (ACoS), or the money spent by the utility to reach power to consumers and which is arrived at on the basis of KSEB's annual average revenue requirements and its annual sales revenue, is now Rs 6.42 per unit. The average realisation from domestic consumers was only Rs 4.13 per unit, which covers just about 75 per cent of the ACoS. Now, with this tariff hike, it has gone up to Rs 4.62, which is still not good enough to cover 80 per cent of the ACoS.

The ERC chairman rationalised the higher increase for domestic consumers saying that the KSEB was mandated by law to collect at least 80 per cent of the average cost of supply from them.

From certain commercial consumers, the realisation is already 50 to 150 per cent more than the ACoS. The Centre's Tariff policy says that not more than 20 percent should be collected even from the biggest commercial establishment. This is why the increase in commercial and industrial tariffs are relatively lower.