LS poll may further delay power tariff hike

Thiruvananthapuram: Not just calamity cess, the impending general election seems to have prompted the authorities concerned to put on hold the announcement of fresh power tariff hike.
According to sources, the Kerala State Electricity Regulatory Commission (KSERC) is unlikely to announce before general elections the new power tariff revision as it has failed to receive green signal from the state government. “KSERC is ready with the new power tariff document. But, it doesn’t want to announce the same without the consent of the state government. Since the government is of the view that a power tariff hike at this point of time would be a bad idea, the announcement may be delayed further. Though the commission is regarded as an independent institution, they normally wont prefer to go against the wishes of the government in office,” sources said.

KSEB had sought around 9% increase in the power tariff rate for the first two years of control period (2018-19-2019-2020) and further 5% increase in second control period (2020-21, 2021-2022). It’s for the first time that the multi-year tariff is being rolled out for the four years together. The commission had finalized the modalities for the tariff revision and the KSEB had filed its tariff petition by the end of October last. It was expected that the commission would announce the revision at least by January. Sources said the commission has resolved to sanction around 6% increase in the tariff.

“The KSEB filed the tariff petition by October last in 2018 as the commission finalized the guidelines only by the same month. The delay in tariff announcement would badly affect the finances of the board, the impact of which would naturally get passed to consumers in the coming years. The new tariff should have come into effect on April 1, 2018. Now, the new tariff could not be collected with retrospective effect. But it would reflect in the tariff petitions the board filing in future. In fact, it was such delays that wrecked the financial stability of KSEB. Such oversights in the past had resulted in accumulating financial burden of Rs 5,500 crore in the past seven years. Had it not been for recovering such amount, the KSEB would not have even required to seek tariff revision of this magnitude,” said a KSEB official.

Subsequent to the delay in tariff revision, the credit rating agencies would all likely to downgrade KSEB’s credit ratings, which would further tighten the utility’s financial position and borrowing capacity.