Karnataka | Power bill to go up from April 1 as tariff to rise by 36 paise/unit

Bengaluru: Electricity consumers in Karnataka will have to pay a surcharge of 36 paise for every unit but Gruha Jyothi beneficiaries need not worry.

This surcharge will be 35 paise per unit for 2026-27 and 34 paise for 2027-28, according to an order issued by a three-member Karnataka Electricity Regulatory Commission (KERC) on March 18.

The surcharge will cover the government's portion of Pension and Gratuity (P&G) payments for retired employees of the KPTCL and electricity supply companies (Escoms). The arrears — amounting to Rs 4,659.34 crore — are for the period from January 2023 to March 2025.

From May, consumers will receive electricity bills with an added surcharge under the P&G column, according to Bescom.

Escoms proposed a multi-year tariff hike in the Annual Revenue Requirement (ARR) submitted to the KERC last year. The government's share of P&G — included in KPTCL transmission charges — was to be collected from consumers.

The KERC order, however, states: "The government’s portion of P&G contributions should be indicated as a distinct component to be collected from the consumers in the retail supply tariff rather than including the same in the transmission tariff to ensure accuracy and transparency in the tariff structure and also to ensure proper accounting and remittance of the amount by the Escoms to the pension trust."

It is unclear whether the KERC will adjust the 36-paisa surcharge against the 67-paisa tariff hike when it will decide on the increase, or treat the surcharge separately. In the latter case, customers may have to pay Rs 1.13 per unit if the 67-paisa hike is approved.

KERC members declined to clarify.

According to a senior Bescom official, the KERC is expected to announce the power tariff hike next week.

Why hike for P&G?

In 2021, the state government directed the Karnataka Power Transmission Corporation Limited (KPTCL) to collect its portion of P&G from consumers. However, when the KPTCL proposed it in the ARR filing, the KERC rejected it, saying that's not allowed under the Karnataka Electricity Reforms (KER), 2002.

A 2022 amendment to the KER allows transferring the government’s arrears to KPTCL. However, the KERC kept rejecting, stressing that government responsibility cannot be transferred to the KPTCL by adding a provision to the rule.

In 2023, the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) filed a writ petition against the KER amendment but the high court dismissed it on March 25, 2024.

In Tuesday's order, the KERC noted that the court’s dismissal of the writ petition had "led to a significant directive, mandating the commission to necessarily include the government’s portion of pension and gratuity contributions in the consumer tariff."

What minister said

Energy Minister K J George claimed that the hike follows the court order and allows the KPTCL and Escoms to recover customer pension and gratuity payments.

"After the dissolution of the Karnataka Electricity Board (KEB) and the formation of the KPCL and five Escoms, the-then BJP government submitted a proposal to the KERC in March 2022, seeking approval to recover pension and gratuity contributions from customers. However, the KERC did not approve the proposal at that time. Following the high court's order, KERC has issued a new directive,” George added.