Electricity rates set to rise in Kerala; summer tariff under consideration, says Minister Krishnankutty

Kerala's electricity rates are set to rise due to a decline in domestic production, with the Regulatory Commission reviewing the rate increase report submitted to KSEB.

Deepu Mohan

First Published Dec 2, 2024, 10:34 AM IST | Last Updated Dec 2, 2024, 10:34 AM IST

Palakkad: Electricity rates in Kerala are set to rise, as confirmed by Electricity Minister K. Krishnankutty while speaking to Asianet News. The rate hike is deemed unavoidable due to a decline in domestic production, which has impacted the state's energy supply. The Regulatory Commission has completed its evidence collection regarding the rate increase, and the final decision will be made after reviewing the report submitted to the Kerala State Electricity Board (KSEB).

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The minister emphasized that any rate adjustment will aim to avoid burdening consumers, with a summer tariff being considered as part of the solution. The high cost of purchasing electricity from outside the state during the summer months is one reason behind this proposed tariff. Furthermore, the government is considering introducing different rates for day and night, with the goal of managing demand more efficiently.

Meanwhile,KSEB has proposed an average tariff hike of 8%, which translates to an increase of at least 34 paise per unit.

KSEB's financial situation is marked by a significant gap between revenue and expenditure. The board's monthly revenue stands at Rs 1,950 crore, while its monthly expenditure is Rs 1,750 crore. Additionally, KSEB requires Rs 900 crore to purchase electricity from outside sources and Rs 300 crore to repay loans. The board estimates an annual loss of over Rs 2,000 crore.

However, the regulatory commission has estimated lower losses: Rs 1370.09 crore for this year, Rs 1108.03 crore for next year, and Rs 1065.95 crore for 2026-27. The tariff revision will be based on these estimates.

If the proposed tariff hike is implemented, KSEB expects to generate additional revenue of Rs 812.16 crore this year, Rs 1399.93 crore next year, and Rs 1522.92 crore in 2026-27. Furthermore, a proposed summer tariff of 10 paise per unit from January to May is expected to generate extra revenue of Rs 111.08 crore this year, Rs 233 crore next year, and Rs 349 crore in 2026-27.

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