KERC meeting: Consumers vehemently oppose Mescom’s proposal for 59 paise per unit tariff hike

Mangaluru: The Mangalore Electricity Supply Company Limited (Mescom), has presented a proposal to the Karnataka Electricity Regulatory Commission (KERC)  to hike the average electricity rate by 59 paise per unit.  However, objections were raised that the rate hike proposal adds a burden on consumers.

The proposal for the rate hike was put forth by Mescom’s Managing Director, Padmavathi, during a public hearing on power tariff revision conducted by KERC at the Mescom Auditorium in Bejai on Monday. Despite the insistence of industrialists, farmers, and the general public against any increase in prices due to the already high cost of electricity, Mescom defended the necessity of the hike to cover rising expenses and revenue shortfalls.

During the hearing, Chairman P. Ravikumar, participating via video conference, expressed apprehension about the sustainability of continually increasing expenses without a corresponding improvement in service quality. To this, Mescom MD asserted that there is a need to increase the rate to cover the increase in expenditure and revenue shortfall.

Some attendees raised concerns about previous rate adjustments, particularly the abrupt 40% increase for consumption exceeding 100 units, which eliminated certain slab structures. Satyanarayan Udupa of Bharatiya Kisan Sangh Udupi highlighted that this adjustment disproportionately affects consumers, even those with only slightly higher consumption. There were calls for the continuation of the slab-based tariff system to alleviate the burden on household consumers.

Criticism was also directed towards Mescom’s data on agricultural pump sets, with claims that proper metering has not been implemented, leading to inaccuracies. Suggestions were made to prioritize 100% metering to ensure fairness in electricity consumption assessment, especially for farmers.

Furthermore, concerns were voiced regarding outstanding dues, such as the Rs 220 crore owed by Mysore Paper Mill. Consumers argued against further rate increases, especially considering Mescom’s reported healthy income.

Anantesh Prabhu, President of the Karnataka Chamber of Commerce and Industry (KCCI), warned of additional strain on already struggling small and medium industries if electricity rates rise.

Calls were made for the commission to prioritize consumer interests, particularly in light of contrasting policies at the central and state levels regarding solar power generation.

The meeting also saw objections from ice plant representatives and demands for reconsideration from various industry sectors impacted by potential rate hikes.

The KERC accepted a report submitted by MSEZ following the Mescom public hearing.

According to Mescom’s MD, in the upcoming fiscal year 2024-25, Mescom has projected a revenue demand of Rs 5281.94 crore against an expected revenue of Rs 4,929.98 crore, resulting in a deficit of Rs 351.96 crore.

To address this shortfall, Mescom proposed raising the LT household electricity rates from Rs 4.75-7.75 to Rs 5.15-7.95 per unit, commercial rates from Rs 8.50 to Rs 8.80, and industrial rates from Rs 6.10-7.10 to Rs 6.30-7.30.

Similarly, HT rates are proposed to increase from Rs 7.25 to Rs 7.30 for households, Rs 9.25 to Rs 9.30 for commercial consumers, and Rs 7.40 to Rs 7.45 for industrial consumers.