It was on July 8 that Kerala State Electricity Board Limited (KSEBL) upped tariffs for domestic consumers by 11.4 per cent; the increase in monthly fixed charge ranged from Rs 5 to Rs 70 and per unit charge rose between 25 paise to 40 paise.
Now, barely four months later, the KSEBL wants the Electricity Regulatory Commission (ERC) to allow it to collect a 'fuel surcharge' of 13 paise per unit from consumers to make up for the additional liability it had to bear on account of fuel purchase during the first quarter of 2019-20 fiscal, between April 2019 and June 2019.
Thanks to the July hike, even average domestic consumers (households consuming 101-150 units a month, a group that constitutes nearly 30 per cent of domestic consumers) have found their monthly bills shooting up by Rs 40 to Rs 60. The fuel surcharge, if allowed, will push it further up by Rs 5 to Rs 10.
If the July hike would fetch the KSEBL Rs 902 crore during 2019-20 fiscal, the proposed fuel surcharge has been sought to recover the Board's additional burden of Rs 72.75 crore.
The actual additional liability of KSEBL in the first quarter of 2019-20 is Rs 75.93 crore. This is on account of purchasing 4384.90 million units (MU) of extra energy from central generating stations (CGS) and independent power producers (IPPs). However, as per the ERC regulations, only Rs 72.75 crore is admissible.
Summer of 2019
According to KSEBL, peak demand touched the all-time high of 4316 MW during April 2019. Daily consumption too soared to a record high of 88.1029 MU. The average daily consumption during April and May were 80.9969 MU and 82.5640 MU respectively, both the figures have set new records for these months.
Add to this, there was a deficit in power generation and sales. Actual hydro generation was less by 267.96 MU. Power from CGS decreased by 253.73 MU. Renewable energy purchase was less by 136.84 MU. And power purchased from private IPPs outside the State through long term contracts decreased by 159.38 MU against the approved quantum.
To make up for this, KSEBL had in fact purchased 559.78 MU from the short term power market, through exchanges and by means of power transfer, at a cost that was far less than the average cost of power purchase approved by the ERC for 2019-20. KSEBL had managed to get outside power at a rate of Rs 3.44 per unit; the ERC's approved average cost of power purchase is very close to Rs 4.
Nonetheless, KSEBL sources maintain that the cost was still higher when compared to the cost of power from the hydel stations and CGS that it was entitled to during the period. “The marginal cost of power from our own sources would have been much lower,” a top KSEBL source said, justifying the need for a surcharge.
Weeping for losses, silent on gains
Intriguing is KSEBL's selective approach to fuel cost adjustment. Just the way power purchase liabilities can be recovered from consumers, the ERC regulations say any gains that come KSEBL's way should also be passed on to consumers. KSEBL has never bothered to share the spoils. No fuel cost adjustment petitions have been filed by KSEBL whenever there were gains. For instance, not a single petition was filed during 2018-19 fiscal, a period when the state witnessed the highest ever rainfall in history.
The latest demand for a surcharge looks untimely not only because the tariff hike is still fresh. Figures rule out a crisis at least for a year, it is extended peacetime for KSEBL.
Bad move in good times
KSEBL is sourcing more power from cheap hydel stations than during the corresponding period last year. If the average daily hydel generation last November was 12 MU, this time it is over 20 MU. Result: Less dependence on costly outside purchases.
KSEBL's hydel stations can afford to generate more because the inflow into their reservoirs are also high. The inflow is as high as during 2018-19, the fiscal with the highest rainfall. Result: Our reservoirs, even after generating more power than is normal during the period, are 80 per cent full.
Idukki, the state's largest dam, has enough water to generate 506 MU. Last year same time, it could generate just 460 MU.
