All five electricity supply companies (Escoms) have sought for an average hike of 70 paise a unit for users in Karnataka.

Revenue deficit

The Escoms have submitted their request to the Karnataka Electricity Regulatory Commission (KERC) indicating that the hike is necessary due to the revenue deficit of about Rs 1,700 crore and has sought the hike to bridge this gap.

According to the Karnataka Electricity Reforms Act, Escoms can only make a plea for hike in tariff before the KERC. The Escoms which have sought hike are: Gulbarga Electricity Supply Company (Gescom), Hubli Electricity Supply Company (Hescom), Bangalore Electricity Supply Company (Bescom), Chamundeshwari Electricity Supply Company (Chescom) and Mangalore Electricity Supply Company (Mescom).

The trade and industry have expressed anguish over Escoms request for power tariff hike. They said Escoms should also look at the efficiency improvement (loss reductions) which can take care of their revenue deficit. It may be noted that during the previous occasion also, Escoms had projected a revenue deficit of Rs 2,538.75 crore. However, after examination of records, the KERC had come to a conclusion that the revenue gap was just over Rs 652 crore.

M. Lakshminarayan, President, Bangalore Chamber of Industry and Commerce (BCIC), said, “The industry is already facing severe hardships due to unscheduled power cuts across the State and is struggling to manage its production and growth.”

“The proposed hike of 70 paise a unit will only further aggravate the situation and shall erode margins of the industry which is already facing multiple challenges. This will result in increase in prices leading to higher inflation,” he added.

Anuj Sharma, Chairman, energy, environment and water expert committee, BCIC, said, “The frequent tariff revision exercises have never been taken up in such a short time in the past. If this proposal from Escoms is accepted, then Karnataka will have highest energy charges/base rate among the Southern States and will be certainly detrimental to industrial development in the State.” anil.u@thehindu.co.in