Karnataka electricity consumers will see higher bills in 2025-26 as KERC introduces an annual “top-up” mechanism.While base tariffs remain unchanged until 2027, the top-up may raise charges by 8–10 paise per unit to cover ESCOMs’ costs and subsidies.
Electricity consumers in Karnataka are set to face higher power bills in the coming financial year, even as the Karnataka Electricity Regulatory Commission (KERC) maintains that there is no formal tariff hike. Instead, the commission has introduced what it terms a “true-up” or “top-up” mechanism, which effectively allows periodic increases in electricity charges to account for financial adjustments and market conditions.
While KERC revised electricity tariffs in March 2024 and assured consumers that rates would remain unchanged for the next three years, it had also kept provisions for revisions linked to market fluctuations and outstanding dues of Electricity Supply Companies (ESCOMs). Citing these provisions, the commission has now decided to impose an additional financial burden on consumers through the annual top-up model.
‘Top-Up’ To Be An Annual Exercise: KERC
KERC Chairman P Ravi Kumar said Karnataka had adopted a uniform electricity tariff structure for a longer period for the first time. However, he clarified that while base tariffs would remain unchanged until 2027, annual true-up or top-up revisions would continue.
Related Articles
“This is the first time Karnataka has adopted a uniform electricity tariff for a longer duration. However, top-up or true-up revisions will be carried out every year,” he said.
Unlike Karnataka, most other states revise electricity tariffs once every five years. Karnataka, which earlier followed annual revisions, will now revise base tariffs once every three years, with interim adjustments through the top-up mechanism.
Power Tariff May Rise By 8–10 Paise Per Unit
A senior KERC official, speaking on condition of anonymity, said the proposed top-up would be uniform across all ESCOMs and would apply to all categories of consumers.
“Unlike a tariff revision, the top-up will be applicable across the board. It is calculated after considering multiple factors. The increase may be in the range of 8 to 10 paise per unit,” the official said.
For the current financial year, the calculation includes cross-subsidy adjustments sought by ESCOMs for 2023 and 2024. It also factors in the agricultural subsidy, which is borne by the state government but is included while determining overall electricity costs.
Agricultural Subsidy Adds To Financial Pressure
An official from the Energy Department said the agricultural subsidy had become a significant financial burden and that ESCOMs had been asked to rationalise it.
“ESCOMs revised their calculations and submitted a proposal to KERC, reducing the projected rate from ₹8.30 to ₹7.70 per unit,” the official said.
No Fuel Adjustment Charge For 2025–26
KERC has decided not to impose any Fuel Adjustment Charge (FAC) for 2025–26, citing stable coal prices and improved coal supply to thermal power plants. The steady availability of domestic coal has reduced the need for costly imports.
Officials also pointed to a greater emphasis on renewable energy this year, where generation and supply costs are structured differently.
“When all these components are factored in, the overall cost of electricity comes down. However, there will be no reduction in tariffs as the Gruha Jyothi scheme, which provides free electricity up to 200 units, must be accommodated,” the KERC official said.
He added that while consumers would still see an increase in electricity charges, it would be implemented as a top-up rather than a tariff revision.
Earlier Tariff Changes Still In Effect
In March 2025, KERC reduced the per-unit electricity charge for domestic and industrial consumers but increased the fixed charge by ₹25. It also imposed an additional surcharge of 36 paise per unit towards pension and gratuity contributions for Energy Department employees.
