Thiruvananthapuram: The Kerala State Electricity Regulatory Commission (KSERC) on Tuesday allowed the Kerala State Electricity Board to impose a fuel surcharge of 9 paise per unit during January 2025 to recover the liability the public utility incurred due to the increase in power purchase costs from April 2024 to September 2024.

This fuel surcharge of 9 paise is in addition to the automatic fuel surcharge of 10 paise per unit that the KSEB is already collecting from consumers. The COmmission had allowed KSEB to collect such a 9 paise fuel surcharge, over and above the usual surcharge of 10 paise, during December too. 

KSEB, in its petition to the KSERC on October 30, had said that the automatic fuel surcharge of 10 paise per unit alone was not enough to cover the increase in fuel costs. (The practice of automatic recovery surcharge of 10 paise began from April 2023.)

KSEB said it was short of Rs 37.47 crore, and, therefore, sought an additional surcharge of 17 paise per unit to recoup the amount.

The KSERC did an assessment and found that between April and September 2024, the fuel purchase cost the KSEB would not be able to recover if it resorted to just the automatic cost recovery surcharge of 10 paise was Rs 54.4 crore.

Of this, KSEB had recovered Rs 20.21 crore in December by charging a nine paise surcharge. On top of it, KSEB had also carried out an excess recovery of Rs 12.53 crore from consumers. So the balance amount left to be collected, according to the KSERC, is Rs 21.70 crore, and not Rs 37.47 crore as claimed by KSEB.

An increase in power purchase costs over the KSERC-approved rate is not a rare event. Take the central generating station Ramagundam Super Thermal Power Stage I and II. The KSERC-approved rate was Rs 2.92 per unit. However, KSEB had to purchase power at Rs 3.953 per unit in April and May, Rs 4.131 per unit in June, and Rs 4.163 per unit in July. 

Various factors cause power purchase costs to shoot up. One, variations in energy availability from various approved sources of power purchase due to coal shortage or unscheduled outages in generating stations or transmission lines. Two, variation in the prices of primary and secondary fuels or variation in cost of transportation.