Bescom says tariff revision necessary for more revenue

State argues it is unable to provide additional subsidy

The Bangalore Electricity Supply Company (Bescom) has submitted that the revision of tariff is  necessary to bridge the revenue gap of over Rs 1,500 crore.

Bescom has cited the increase in power purchase cost, change in consumption pattern and non-realisation of approved tariff as the reasons.

In his presentation before the Karnataka Electricity Regulatory Commission (KERC), Pankaj Kumar Pandey, Managing Director, Bescom, said: “The cost to purchase power has increased so much that about 78 per cent of the total expenditure was spent on it. As much as Rs 9,624 crore was spent from a budget of  Rs 12,323 crore.”

He said that  Bescom was forced to purchase energy for short-term through Section 11 and major Independent Power Producers (IPPs), because of non-availability of hydel and thermal powers from the Karnataka Power Corporation Limited.

Pandey said that there was a sharp increase in the cost of thermal power due to the use of  imported coal and transportation costs.

“Imported coal is being used due to the shortage of domestic coal. Domestic coal is available at Rs 3,907 per ton, while imported coal costs Rs 5,864 a ton,” he said.
When Pandey said that the Udupi Power Corporation Limited (UPCL) has increased the power cost from Rs 4.08 to Rs 4.60 a unit in the year 2012, the Commission sought details about how much the Bescom pays to the UPCL.

He also said that the increase in number of unmetered sales was the reason behind the Bescom not realising the approved tariff during the previous year.

Goverment on subsidy

Pandey also mentioned that after filing the tariff revision, the Bescom on February 3, 2014, wrote to the State government, seeking payment of an additional subsidy amount of Rs 1,539 crore to meet the gap for the year 2013. In reply to which, the State on March 22, 2014, said that it will not be able to provide additional subsidy, but suggested to seek the approval of the KERC.

However, the Commission said that it has not received any communication in this regard either from the government or from the power utility.

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