An inevitable tariff hike

THE KARNATAKA ELECTRICITY Regulatory Commission (KERC) has announced the much-expected but moderate across-the-board increase in power tariff. Though the rise ranges from 10 to 36 per cent for various categories, the average hike works out to 17 per cent. Given the experience in neighbouring Andhra Pradesh, where a steep revision sparked a State-wide stir earlier this year, the exercise in Karnataka seems to be more pragmatic. Two features stand out in this effort - there has been a wholesale increase for domestic consumers, particularly for what are called `All-electric homes' (AEH); and the first step has been taken to bring agricultural connections under the net. It may not be a very popular move and the Opposition as well as farmers' associations may not take kindly to it. But in the present circumstances and in the wake of the power sector reforms to which the Chief Minister, Mr. S. M. Krishna, is committed, the KERC has done a balancing act as best as it could. The Karnataka Power Transmission Corporation (KPTC) sought an average hike of 23 per cent to cut down on its losses. But the KERC has accepted only a 17 per cent increase.

To make up for the lower increase, the KERC has asked the KPTC to prune its transmission and distribution losses. It remains to be seen whether the Transmission Corporation can achieve this and in turn raise more revenue. With this tariff revision, the KPTC hopes to mop up nearly Rs. 600 crores. Its next target must be for 100 per cent metering of all power connections. A beginning has been made in the farm sector, with an incentive to those consumers who install the meter. The flat rate for irrigation pumpsets of up to 10 hp, without meter, will be Rs. 45 per hp per month. When metered, the fee will be 50 paise per unit, but a minimum of Rs. 300 per annum. This seems to be a good attempt to encourage metering of pumpsets and should pave the way for an assessment of the actual power consumed by the agriculture sector. Simultaneously, the KPTC must launch an exercise to find out whether some of the power meant for the farmers is being diverted for other purposes. That must be curbed. When full metering of all power connections is achieved, the Corporation must be able to substantially increase its revenue and minimise the transmission and distribution loss which ultimately should not exceed 15 per cent.

Over a period of time, the Regulatory Commission and the Transmission Corporation must work together to drastically reduce the losses, streamline distribution, ensure 100 per cent metering, minimise the number of categories of consumers and merge the fuel escalation charge with the tariff. Since the revision will now become a regular and routine process, there is no need to have a complicated formula for calculation of the charges the consumer has to pay. This needs to be drastically simplified so that any common consumer can understand the basis. The Chief Minister appears confident that since the revision is not very steep, it will be absorbed by the consumers and the political parties will accept the overall need for reforms in the power sector. If this process turns out to be smooth, Karnataka must then concentrate on enhancing generation and focussing on the quality of energy supplied to all consumers. The authorities must realise that so long as there are no frequent power cuts or outages and the quality of electricity is maintained, the consumers may not be so vocal in their complaints. While the genuinely small farmers and those below the poverty line need a special consideration, the Government cannot afford to tax industry too much to cross-subsidise other sectors or wink at blatant theft of power by vested interests.

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Section  : Opinion
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