Power tariff hike in Karnataka was inevitable: Assocham

Industry body Assocham has said the hike in power tariff by the Karnataka Electricity Regulatory Commission (KERC) was inevitable and may affect the competitiveness of the state’s industry.

The hike in tariff was inevitable, so as to maintain the sound financial situation of state power utilities, J Crasta, co-chairman, Assocham Southern Regional Council, said reacting to the increase in tariff announced by KERC on Monday.

However, he added that the increase in tariff, particularly that applicable to industrial consumers, was bound to affect the cost structure of industry, specially high power consuming units.

“This may affect the competitiveness of state industry.” On April 30, KERC ordered revision of electricity tariff for all Electricity Supply Companies (ESCOMs) in the state for 2012-13, with the average increase being 13 paise per unit.

Crasta added that given the serious drought situation in some parts of the state, it was but natural for KERC to cut tariff for LT water supply installations, Crasta added.

He expressed satisfaction at complete liquidation of ‘regulatory assets’ amounting to Rs 401 crore. He said ideally no such mechanism should be resorted to.

Welcoming introduction of the ‘Time of day tariff’ for HT (high tension) consumers, he said the same would incentivise even distribution of load throughout the day.

On KERC’s plan to introduce mechanism for collection of fuel cost adjustments from consumers, Crasta said it should be done in a transparent manner and inefficiencies of the system should not be passed on to consumers.

He further emphasised the need for ESCOMs to increase efficiency and cut down T&D losses from 18.71 per cent to under single digit figure.

This, he said, was essential to optimise use of power available in the State and the only way to contain the need for regular increase in tariff.

Source: ET

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