Tariff hike expected as Kerala faces electricity shortage amid regulatory scrutiny

Thiruvananthapuram: Despite receiving normal rainfall, Kerala is likely to face a shortfall of approximately 20 per cent in electricity supply from October to April, according to the Kerala State Electricity Board (KSEB). To address this issue, the Regulatory Commission has granted KSEB permission to engage in short-term contracts, with prices for these contracts ranging from Rs 5.45 to Rs 7.23 per unit.

The Commission has accused KSEB of failing to enter into medium- to long-term contracts at lower prices, noting that repeated lapses could lead to penalties under tariff regulations.

The impending power crisis is mainly due to the cancellation of long-term contracts for 465 megawatts, which could have provided electricity at Rs 4.41 per unit. This cancellation occurred solely at the intervention of the Regulatory Commission.

Meanwhile, KSEB is burdened with repaying power acquired from other states due to a shortage last summer. Additionally, electricity consumption is projected to increase by 5 per cent in the coming months compared to previous years.

KSEB has approached the Supreme Court, challenging the Regulatory Commission's decision to annul lower-cost contracts, a ruling that has been upheld by the Appellate Tribunal. The Supreme Court is set to consider the matter on Monday.

In the meantime, the Regulatory Commission is preparing to announce a rise in electricity tariffs by the end of October. Prior to this decision, the Commission has requested KSEB to provide feedback regarding consumer complaints and arguments raised during a recent hearing. KSEB is expected to submit this information by early October, with current rates remaining in effect until October 31.