Escoms want tariff order review; seek hike for industries, business

Bengaluru: For the first time in the recent past, electricity supply companies (Escoms) in the state have sought an amendment to the tariff order passed by the Karnataka Electricity Regulatory Commission (KERC) in March 2025.

In March 2025, KERC had allowed Escoms to collect 36 paisa per unit from consumers, for paying up the government part of the pension and gratuity of its employees.

In their review petition admitted by KERC on July 8, Escoms have sought increasing the tariff for industrial and commercial establishments and reducing it for agricultural pumpsets, saying this is required to fill the revenue gap of Rs 4,620 crore.

According to the petition, the state government has agreed to release a subsidy of Rs 2,362.47 crore in addition to the Rs 16,021 crore announced in the budget to mitigate the overall shortfall in revenue. However, that would still result in a revenue gap, necessitating a tariff revision, the petition stated.

According to the budget, the government had allotted Rs 16,021 crore towards pumpset subsidy. However, according to KERC, tariff for agricultural pumpsets was fixed at Rs 8.30 and allowed a sale of 24,868 million units. This would mean that the projected cost on power usage by pumpsets would go up to Rs 20,640 crore, creating a revenue gap.

KERC has asked Escoms to release a public notification on the details and the amendment proposed.

Sources in Bescom said a public notice would be put out in the next couple of days.

Once the notification is out, the stakeholders will have 30 days to file objections, based on which, KERC will draw out an order. 

Industry representatives said they would oppose the proposal once the public notification was out. 

“We pay them taxes and huge power bills. Even after that, we seem to be the target whenever they want to increase their revenue. We will not comment now. Once the public notification is out, we will oppose this. If required, we will also go out and protest,” said an industrialist from Federation of Karnataka Chambers of Commerce and Industry (FKCCI). 

M G Prabhakar, energy expert and a former member of the KERC advisory council, believes the Escoms’ petition may not be legally valid. “We will have to look into the detailed petition to understand its legal validity. However, according to Section 62 of The Electricity Act, 2003, the power tariff cannot be revised more than once in a financial year,” he said.