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Kerala power board proposes tariff hike

According to reports, Kerala State Electricity Board (KSEB) has proposed further increase in tariff in 2013-14 in a bid to realise additional Rs 1,573 crore in revenue.

Of this, Rs 752 crore would be realised from domestic power consumers. Recovering the full amount might deliver a tariff shock, the Board feared.

Unattended gap in accounts is to be treated as a ‘regulatory asset,’ which could be recovered in subsequent years. This was stated in the aggregate revenue requirements and expected revenue from earnings document submitted before the State electricity regulator here on Thursday.

Six months ago, Kerala State Electricity Regulatory Commission had allowed KSEB to raise tariffs to net Rs 1,257.63 crore. KSEB stated that revenue gap would amount to Rs 2,758 crore in the next financial year assuming the billing is based on existing tariff structure.

Year 2013-14 may also witness invoking of heavy fuel surcharge and a revision in the formal tariff structure. Revised estimates say current financial year might leave a still bigger revenue gap of Rs 3,564.4 crore due to erratic monsoons and purchase of expensive power.

Making good such big gap would likely mean a fuel surcharge to be fixed by the beginning of the second quarter of the next financial year. Average cost of supply of one unit of electricity is expected to reach Rs 5.92 during the coming financial year.

But average revenue realisation would be only Rs 4.42, leaving a revenue gap per unit of Rs 1.50. So tariffs would need to be raised 34 per cent to enable KSEB to wipe out entire revenue gap for 2013-14.

Fuel surcharge to recover unattended revenue gap for the current year would be in addition to this. The regulator will conduct hearings in Thiruvananthapuram, Kochi and Kozhikode before taking a decision, dates for which would be announced later.

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