4 months ago
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Electricity bills of consumers of the Bangalore Electricity Supply Company (Bescom) may go up next year if the power utility has its way. Like every year, Bescom has sought a hike of 49 paise per unit across all categories for the financial year (FY) 2024 – 2025 in its tariff proposal submitted earlier this month to the Karnataka Electricity Regulatory Commission (KERC).
The company has also proposed recovering a higher amount of tariff through fixed charges and reducing the energy charges.
Defending the demand, Bescom officials said the hike would be necessary to bridge the estimated revenue loss of ₹1,738.69 crore during 2024 – 2025. The revenue loss for FY 2022 – 2023 was ₹1,078.82 crore and the operating losses were ₹274 crore.
The increased revenue loss and the reason for seeking the tariff hike have been pegged to an increased power purchase cost.
“The hike is based upon the power purchase cost estimated by the Power Company of Karnataka Limited (PCKL),” said a senior official in Bescom.
The official also said that the power purchase cost for the year would be around ₹28,863 crore. While the drought scenario in the State is one of the factors for the increased power purchase costs, the official mentioned that the process of importing and blending coal for thermal power production largely contributed to the rise.
Despite this cost increasing the revenue loss, Bescom is expecting to improve its revenue in FY 2024 – 2025 as it has observed an increase in its sales.
For FY 2023 – 2024, Bescom sought a tariff hike of ₹1.36 whereas the KERC had approved a hike of 70 paise only. This year too, the actual tariff hike will be decided by the commission after public hearings, which are likely to be conducted in February.
“Even if this hike is approved, for most domestic consumers, it would essentially not be a burden as they are covered under the Gruha Jyothi scheme,” a Bescom official said.
Although KERC officials had earlier said that a multi-year tariff (MYT) system, where the tariff for a control period of three years would be fixed at the beginning of the control period, would come into effect from FY 2024 – 2025, it is unlikely, a source in Bescom said.
“It is too late in the year for us to formulate it now. Hence, we have requested the commission to implement it from next year.”
Negative FPPCA
However, the fuel and power purchase cost adjustment (FPPCA) charges have seen a downward trend in recent days.
“The FPPCA for this month was negative as it was –30 paise. But it could not be reflected in this month’s bill as we had spread out the collection of an earlier FPPCA across six months, which would end in December. From next month, the consumers might see a negative FPPCA in their bills,” the senior official said.
The difference between the approved power purchase cost and the actual cost incurred by Escoms is reflected as FPPCA in the electricity bills.
