Another hike in power tariff disapproved

By S. K. Ramoo

BANGALORE, AUG. 5. The Cabinet has disapproved the proposal made by the Karnataka Power Transmission Corporation Ltd. (KPTCL) for another increase in power tariff.

A majority of the Cabinet ministers opposed the proposal as the tariffs were increased by 12.95 per cent only in the beginning of the year. However, it was a political reason that made the Government defer the increase in tariff for power supplied to irrigation pumpsets.

Although the additional resource mobilisation by the KPTCL from the increased power tariff was Rs. 450.92 crores, the revenue gap during 2000-2001 was Rs. 951 crores even after the Government granted Rs. 879 crores as subsidy.

According to the estimates of the KPTCL, the revenue gap will touch Rs. 1,035 crores during 2001-2002 and Rs. 1,164 crores during 2002-2003 after assuming that the Government sanctions Rs. 1,963 crores and Rs. 1,796 crores as subsidy for the respective periods.

The power tariff structure is said to be ``irrational and lopsided'' as the rates for high-tension industrial and commercial power consumers are very high in Karnataka compared to several States. These consumers are made to pay power charges higher than the cost of energy supply. But 12.32 lakh irrigation pumpsets are being supplied power at highly subsidised rates without recovering the cost of distribution. This is because the Government is imposing its ``political compulsions'' on the KPTCL. Although steps are underway to ``corporatise'' it, the KPTCL continues to rely heavily on the annual subsidies from the Government.

The corporation wanted to increase the power tariff to recover the actual cost of power supply, which is Rs. 3.80 per unit. The World Bank mission imposed this condition for assisting the State's power sector reforms. The average realisation rate is only Rs. 2.25 per unit now, though the corporation is procuring power at Rs. 2.80 a unit from power utilities, including the Karnataka Power Corporation Ltd.

The KPTCL is planning to restrict cross-subsidy to irrigation pumpsets and to the beneficiaries of the Bhagyajyothi Scheme. It is also keen to reduce the fixed charges for small- scale industries in the category of 67 HP to 100 HP, and has plans to limit the number of slabs in each category to three.

The findings of the ORG MARG survey on power supply, duration of interruptions in supply and the time taken to rectify faults as perceived by the consumers, say that the KPTCL's performance is ``poor and highly unsatisfactory.''

But, of late, the corporation has adopted a number of consumer- friendly measures, including the introduction of computerised billing in Bangalore and other places, setting up of mobile cash counters and ensuring connections to high-tension power consumers within 24 hours after fulfilling the formalities.

The claim by the KPTCL that transmission and distribution losses for 2000-2001 accounted for only 33.6 per cent lacks credibility. Even if the figure was correct, it would still be higher than the national average.

The corporation requires a massive investment of Rs. 4,871 crores between 2002 and 2010 for the improvement of the transmission and distribution network.

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