The Kerala State Electricity Regulatory Commission (ERC) has announced an average of 6.6 per cent increase in power tariffs across all segments from domestic and agriculture to commercial and industrial consumers. The burden of the hike will fall mostly on industrial and high-end domestic consumers.

ERC chairman Preman Dhinraj, while announcing the tariff revision on Saturday, said that domestic consumers who consume up to 150 units a month, who make up nearly 54 per cent of Kerala State Electricity Board's (KSEB) total domestic consumers of over one crore, will suffer only a marginal increase. A back of the envelope calculation shows it would be in the Rs 43 to Rs 88 range.

In the low middle and middle income segment the maximum increase, that too for even relatively richer households with air-conditioning and consuming up to 250 units, would be Rs 152.5 a month. However, for high-end domestic slabs, for luxury households consuming more than 500 units a month, the monthly bill could increase by up to Rs 1000.

While fixed charges have been hiked by nearly 200 per cent for industrial consumers, the increase in the fixed charges for domestic consumers has been relatively nominal; in the range of 22 to 53 per cent.

What KSEB wanted and what ERC offered

There will be no tariff hike for the lowest slab; those with a connected load of less than 1000 watts and consuming 0-40 units a month, mostly poor households. The tariff in this slab will be retained at Rs 1.50 per unit. The KSEB, in its petition, had not asked for any change.

Demonstrating that the ERC was sensitive to the persisting COVID distress, it has not increased the tariffs for the second lowest slab, 0-50 units a month, too. The tariff of Rs 3.15 for this slab will remain unchanged. The KSEB had wanted this raised to Rs 3.50 a unit.

However, the ERC has allowed the KSEB to charge more than what the utility had asked for in its petition in the highest slab, under which falls large households that consume more than 500 units a month. KSEB wanted the tariff in this slab to be raised to Rs 8.30 from the existing Rs 7.90 a unit. The ERC has now allowed KSEB to charge Rs 8.50 a unit from consumers in this slab.

The new tariffs will come into effect from June 26, Sunday. The validity of the existing tariff, which was revised three years before on July 8, 2019, had expired on April 1, 2022.

The tariff hike has been sought to plug the utility's widening revenue gap, which for 2022-23 is estimated to be Rs 2852.58 crore.

Middle income tariffs

Nearly 85 per cent of the over one crore domestic consumers in Kerala use between 0 and 250 units a month. Within this consumption spectrum, there are six tariff slabs: 0-40 units, 0-50, 51-100, 101-150, 151-200 and 201-250. In these slabs, except for the 201-250 slab, the ERC has announced an increase that is less than what the KSEB had asked for. For the 201-250 slab, the ERC had approved the increase KSEB had sought for: from Rs 7.60 to Rs 8 a unit.

And among these, the ERC KSEBL has proposed the highest increase in the 51-100 and 101-150 consumption slabs, within which falls 53.78% of total domestic consumers in Kerala, mostly 'low middle' and 'middle' income households.

In the 51-100 slab, under which falls 29.15% of the total domestic consumers in Kerala, the tariff has increased from KSEBL has proposed an increase from the existing Rs 3.70 to Rs 3.95, 6.8% increase. The maximum monthly increase in this slab, including the fixed charge, would be Rs 42.5.

In the 101-150 slab, which has 24.63% of the domestic consumers, tariff is proposed to be revised from Rs 4.80 to Rs 5 per unit, a 4.2 per cent hike. The maximum monthly increase in this slab, including the fixed charge, would be Rs 87.5.

The maximum increase in the 151-200 slab, factoring in the increased fixed charge, will be Rs 117.5. The maximum in the 201-250 slab, including the higher fixed charge, will be Rs 152.5.

Here are the existing and the new rates for the first six slabs.

(Slab - Existing Tariff, in Rs- New Tariff, in Rs)

0-40 - 1.50 - 1.50

0-50 - 3.15 - 3.15

51-100 - 3.70 – 3.95

101-150 - 4.80 - 5.00

151-200 - 6.40 – 6.80

201-250 - 7.60 - 8

Rich man's tariffs

Consumption up to 250 units is charged telescopically, meaning the lower units of consumption will be charged at the rate of the lower slabs. Say for instance a household has consumed 210 units. When the tariff is calculated, the first 50 units will be charged at Rs 3.15 per unit, the second 50 units from 51 to 100 will be charged at Rs 3.95 per unit and so on.

The benefit of telescopic charges ends at 250 units. Beyond 250 units, non-telescopic charges kick in. Instead of incremental rates, a flat rate will be used to calculate the tariff. Say a household has consumed 260 units a month. In this case the single rate fixed for the 0-300 units slab will be used uniformly to calculate the tariff.

Non-telescopic charges are applied in five slabs: 0-300, 0-350, 0-400, 0-500 and above 500. However, less than 5% of the total domestic consumers fall under these five slabs.

Here are the existing and the new rates for the first six slabs.

(Slab - Existing Tariff, in Rs- New Tariff, in Rs)

0-300 - 5.80 - 6.20

0-350 - 6.60 - 7.00

0-400 - 6.90 - 7.35

0-500 - 7.10 - 7.60

Above 500 - 7.90 - 8.50