Kanara Chamber of Commerce & Industry Opposes the Recent Power Hike
Mangaluru: As per the provision of the Karnataka Electricity Reforms Act (1999), MESCOM and other ESCOMs proposed the annual hike in the Electricity Tariff to Karnataka Electricity Regulatory Authority (KERC). When the proposal to hike the power tariff was published in the Newspapers, the Kanara Chamber of Commerce and Industry (KCCI) opposed it, especially the hike in the Demand Charges (Fixed Cost). KCCI submitted a detailed note on the consequences of the increase in fixed costs on the economy. Further, KCCI has given various suggestions on matters relating to the power hike to protect the interest of consumers. Even during the Personal Hearing called by KERC, KCCI had vehemently opposed the power hike.
Later, KCCI was disappointed to note that KERC went ahead with the hike despite our opposition. The changes in the power tariff are effective from April of every year. As the model code of conduct was in place, due to the State Assembly Election, the changes in power tariffs were announced immediately after the election.
For High Tension (HT) Consumer
There is a steep increase in the Demand Charges from Rs 265 KWA to Rs 350 per KWA. This shall impact those who have a higher sanction load of power and those who are availing open access power. The unit charges were Rs 7.35 per KWh (per unit) for the first 1,00,000 units and Rs 7.60 per unit for the balance unit. The tariff for 2023-24 is fixed at Rs 7.40 per unit. Hence, the impact on the electricity bill will differ for each industry based on the sanction.
For Low Tension (LT) Consumer
For the LT consumer, the Demand Charges were in the range of Rs. 120 to Rs. 240 per HP for less than 100 HP and Rs 255 per HP for above 100 HP. This is reduced to a fixed Rs. 140 per HP for less than 100 HP and Rs 250 per HP for above 100 HP. The unit charges of Rs 5.85 for the first 500 units, Rs 6.85 for the next 500 units and Rs 7.15 for balance units are revised to Rs 6.10 for the first 500 units and Rs 7.10 for balance units. Hence, here too the impact on the electricity bill will differ for each industry based on the sanction.
Fuel and Power Purchase Cost Adjustment
Further, on 13th March 2023, the KERC approved Fuel Cost Adjustment Charges for MESCOM for 93 paise for bills from April to June 2023. However, due to the model code of conduct, the fuel adjustment cost was not imposed in the Bill raised in April (except in a few cases).
In the Bill issued by MESCOM, the increase is due to the arrears of the tariff hike in April, and additional fuel adjustment costs for April & May 2023. Considering the genuine hardship faced by the consumers especially due to the arrears of power charges hike of April, the KERC has issued revised Fuel Cost Adjustment Order on 2nd June 2023 to collect the fuel adjustment cost at 47 paisa from July to December 2023.
Kanara Chamber of Commerce and Industry (KCCI) is studying the impact of the hike in power tariff on the different industries by getting inputs from its affiliated bodies, the Kanara Industry Association and The District Small Industries Association, Mangaluru. Meanwhile, we note that MESCOM has continued with the rebate of 50 paise for MSME consumers which is in vogue.
After getting the necessary inputs and the outcome of the meeting with the Chief Minister of Karnataka, KCCI will explore suitable options in this regard.