Industry happy over KERC's fair hearing

Though there was all-round opposition to the proposed 40 paise hike per unit of power supplied by the power utility firm in Karnataka, industry is happy over the fair hearing the Karnataka Electricity Regulatory Commission (KERC) gave at its sitting in Mysore on October 9 on the objections to the power tariff increase.

Federation of Karnataka Chambers of Commerce & Industry Energy Committee Chairman M G Prabhakar was all praise for KERC Chairman K P Pandey and its two members.

Speaking to Business Standard after the nearly four-hour sitting by the KERC, he said: "The commission has been very fair in listening to all our points. It even sought clarifications from us. We appreciate it," he said, adding, "But how far it become reality, we will have to wait and see."

Many of those who spoke at the sitting petitioned that the tariff proposal is not in line with the Electricity Act 2003. Administrative and general expenses, employee cost and other variable factors have gone up steeply and these are added to the tariff burden.

Even after five years, the cost of supply to consumers has not been determined and the method of arriving at the average cost and collecting it from consumers is not acceptable, Prabhakar said, opposing the proposed hike.

There has been a tremendous increase in power consumption by IP sets "� 10,000 million units out of the total 27,000 million sold. This is alarming because the state government is spending Rs. 2,000 crore as subsidy, burdening the industry by Rs. 750 crore.

In the meantime, agricultural production is not in consonance with the estimated power consumption by IP sets.

Of the state's net revenue of Rs. 18,000 crore, approximately 11 per cent is spent as subsidy on IP sets without any tangible increase in food production. This speaks of wasteful expenditure, environmental degradation and growing burden on exchequer vis-a- vis tax burden, he said.

Representing Kassia Anand, who petitioned before the KERC said, SSIs are cross-subsidising 43 per cent over the average cost. "This is something which they cannot afford."

He pleaded for a progressive reduction in cross subsidy, energy efficient pump sets, quality and uninterrupted power supply, before embarking on further tariff rise.

Power utility employees' pay scales have been raised 12 per cent from 2003, with retrospective effect. "We cannot recover this burden from our buyers with retrospective effect," he remarked.

Hebbal Industries Association General Secretary Suresh Kumar Jain said rural consumers should be charged proportionate to the hours of power supplied.

Good and early monsoon had saved up to 41 per cent of power consumption in the agricultural sector, as the IP sets were not used and hence there is no need to increase the tariff.

Despite opposition, the industry leaders felt an increase by 5 to 10 paise per unit is on the cards.

The KERC Chairman told reporters after the hearing that the Commission would deliver its judgement on tariff hike on October 16.