Thiruvananthapuram: The Kerala State Electricity Board (KSEB) has proposed an increase of Rs 2.30 per unit for electricity within five years. This proposal demands a hike like never seen before. The application for the hike in electricity rate will be submitted to the Regulatory Commission on Monday. The commission will decide on the rate considering the feedback of consumers and the financial condition of the electricity board.

There was only a hike of Re 1 from 2013-’14 to 2019-’20. The demand put forward by the board is that the price should increase by one more rupee in the coming financial year alone. This would mean about a 20 percent increase in the electricity charges at home. Kerala’s average price per unit is Rs 6.10 currently, which is less than other states. There will be an average increase of about 50 paise per year if the hike demanded by the board is allowed. Kerala will turn into one of the states with the highest electricity rates in India. The average annual hike was 25 paise per year, so far.

Rs 2,800 crore is expected to be earned in the first year and Rs 1,800 crore in the coming years after the hike in the electricity rate. The board has decided to make a capital investment of Rs 28,000 crore in the next five years. This is more than the board's assets made in all these years. That is one of the reasons why the demand to raise the electricity rate is being put forward. Out of this amount, Rs 13,000 crore is from centrally funded schemes for renovating the distribution branches. Rs 8,000 crore is needed to convert all consumers to prepaid smart metres. Although the expense of centrally funded schemes is not reflected in the rates, other expenses must be borne by the customer.

Board to cut expenses 

Employee expenses will be reduced by 10 percent. Rs 1.50 is the current electricity tariff for employees’ expenses, including their salaries and other benefits. It is proposed that this may be reduced by 40 paise. The board had recently approached the commission requesting acceptance to bear the salary expense of about 6,000 employees. Consumers' organisations opposed the proposal that the rate would have to be increased by 15 paise per unit for that. No decision has been taken on this. The effectiveness of the Board's claim to reduce employees’ expenses will have to be measured out in the coming days.

Surplus electricity trade

The surplus electricity made during the day is now being sold outside Kerala. The Board will inform the Commission that this electricity can be given to the industries in Kerala for cheaper rates. This had to be withdrawn, even though the Regulatory Commission included it in the draft of the Tariff Act. Now the board itself backs this demand.

New rates from April 1

The commission will make a decision accordingly so that the new rates will be effective starting April 1. Chairman Dr B Ashok held discussions with consumer and employee organisations about the proposed hike in the rate. Consumer organisations opposed the hike during the time of Covid. 

Most recent hikes

2013-14- 20 paise

2014-15- 25 paise

2017-18- 25 paise

2019-20- 30 paise