Gulbarga Electricity Supply Company Limited (GESCOM) recently sought permission from the Karnataka Electricity Regulatory Commission (KERC) to increase power tariff by 74 paisa a unit across categories, and monthly fixed charges by ₹20 a kV for irrigation pump-sets and ₹10 a kV for other category consumers.
This has, however, attracted criticism by users who argue that the company was attempting to transfer the financial burden on to consumers in its bid to increase the revenues instead of trying to explore other avenues of revenue generation such as the collection of the subsidy dues from the government.
Data collected by The Hindu shows that the State government has to pay ₹2,524.06 crore, including the interest of ₹1,458.43 crore, to GESCOM for the free power to farmers’ irrigation pump-sets since 2007-08, when the free electricity to irrigation pump-set scheme was launched.
The government has been repaying lesser subsidy than the actual claim by GESCOM and it has led to the accumulation of debts.
As per the information provided by GESCOM authorities, the outstanding dues as on November 2019 were ₹1,065.63 crore.
Interestingly, the GESCOM is not claiming interest on the dues, though there is no provision in the Electricity Act 2003 for exempting the government from paying the interest on the dues.
“GESCOM collects interest from its consumers. Whey is it not applying the same rule to the government? Collecting interest from poor consumers and exempting government from paying interest is not just unfair, but also a violation of the Electricity Act 2003,” Deepak Gala, an environment activist, said.
In fact, the stakeholder had raised the issue in a consultative meeting in 2018.
Considering the demand, even the KERC, in its tariff order in 2018, directed GESCOM to take up the issue with the government.
“The matter of charging interest on the subsidy dues shall be taken up by the GESCOM with the government, as non-release of subsidy results in borrowing from other sources by paying necessary interest to pay its liabilities which cannot be passed on to consumers,” the order observed.
As per the KERC directions, GESCOM wrote to the Department of Energy requesting it to release the interest on the arrears of subsidy between 2007-08 and 2016-17. However, the government turned down the demand.
“In a similar matter, the Punjab State Electricity Regulatory Commission (PSERC) had directed Punjab State Power Corporation Limited (PSPCL) to pay the interest on the dues in 2017-18. The Punjab government had paid ₹5,600.7 crore subsidy to PSPCL during 2016-17, in staggered installments. The commission levied interest on the delayed payment of subsidy at 9.70%, which worked out to ₹307.79 crore. The Karnataka government should also pay the interest on dues as the Electricity Act is applicable to entire India,” Mr. Gala says.