KERC Hikes Commercial, Industrial Power Tariffs From April; Prahlad Joshi Says Anti-Industry Govt

By Mohammed Rafiq Mulla

Bengaluru: The Karnataka Electricity Regulatory Commission (KERC) has revised power tariffs, increasing rates for commercial and industrial consumers despite earlier assurances of imposing no hikes. The revised tariffs will come into effect from April. However, the decision has triggered protests from business groups and drawn political criticism.

The Commission approved higher energy and demand charges for commercial categories LT-3A and HT-2B, and industrial categories LT-5 and HT-2A. These apply to shops, manufacturing units, MSMEs, IT and tech parks, theatres, hotels and other commercial establishments.

The tariffs have been hiked from a minimum of 10 paise to a maximum of 95 paise per unit for industrial and commercial consumers.

Under the revised structure, LT-3A commercial tariffs have been increased from Rs 7 to Rs 7.10 per unit, with a fixed charge of Rs 235 per kilowatt while LT-5 industrial tariffs have gone up from Rs 4.50 to Rs 5.20 per unit, with Rs 165 per horsepower as fixed charge.

On the other hand, HT-2A industrial consumers will now pay Rs 6.70 per unit, up from Rs 6.60, with a demand charge of Rs 365 per kVA while HT-2B commercial consumers such as complexes, theatres and hotels will see a sharper rise from Rs 5.95 to Rs 6.90 per unit, with a demand charge of Rs 390 per kVA.

Earlier on February 20, a public hearing had witnessed opposition to the proposed hike. Industry representatives claimed that the Commission had then indicated that tariffs would not be increased. The latest order has therefore led to anger among trade and industry bodies.

Relief For Agriculture, Industry Opposes

The five power distribution companies had reported a combined revenue gap of about Rs 4,620 crore in the previous financial year and have sought tariff revision to bridge the shortfall. In their submissions, they cited subsidy allocations and revenue adjustments approved by the Commission.

While the state government allocated Rs 16,021 crore as subsidy for free power to agricultural pump sets, the approved revenue requirement was Rs 20,640 crore. Although the government later assured an additional Rs 2,362 crore, the distribution companies sought recovery of the remaining gap through higher tariffs for commercial and industrial users. This request was accepted by the Commission.

Even as commercial and industrial tariffs have been raised, rates for agricultural pump sets have been reduced from Rs 8.30 per unit to a range between Rs 6.57 and Rs 7.79, depending on the distribution company. Free power supply for pump sets up to 10 HP will continue under government norms, reducing the subsidy burden.

Industry bodies have termed the revision “unscientific” and unclear. Members of the FKCCI energy committee said their objections were not considered and pointed out that the order does not clearly state whether arrears from the hike will be collected retrospectively, through monthly adjustments, or in instalments.

Prahlad Joshi Slams Karnataka Govt

Union Minister Prahlad Joshi has criticised the decision to increase electricity tariffs for commercial and industrial users. Responding to the KERC order, the Union Minister said the state government has “hit a half-century” in raising prices, alleging that it has increased the rates of more than 50 goods and services so far. He termed the latest power tariff hike a large-scale increase and described it as the height of misgovernance by the Congress government.

Joshi also alleged that such decisions would drive industries out of Karnataka and claimed that the state government is anti-industry. He further said the financial condition of the state is very serious, accusing the government of allowing corruption to cross limits and fiscal discipline to collapse. He claimed that Karnataka’s total debt has reached Rs 8.4 lakh crore.

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