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Mescom seeks tariff hike of Rs 1.67 per unit, consumers oppose

Mescom wants the hike to deal with a revenue deficit of Rs 943.26 crore it will undergo in FY22
Last Updated 20 February 2021, 08:36 IST

Associations representing industries, consumers and farmers opposed Mescom’s proposal seeking an average tariff hike of Rs 1.67 per unit for dealing with a revenue deficit of Rs 943.26 crore, which the company is expected to undergo during the financial year 2021-22.

The Mescom submitted its tariff revision proposal to Karnataka Electricity Regulatory Commission (KERC), headed by Shambhu Dayal Meena, which held a public hearing at Deputy Commissioner’s office on Friday.

The hearing sought the opinions of the general public and various stakeholders for Mescom’s move.

Mescom MD Prashanth Kumar Mishra presented to the Commission reasons why the company has sought the hike. He said that Mescom, whose jursidiction spreads across Dakshina Kannada, Udupi, Chikkamagaluru and Shivamogga districts, required revenue of Rs 5,119.61 crore.

However, the earning expected from consumers was Rs 4,176.35 crore, resulting in a deficit of Rs 943.26 crore.

The MD claimed that most of the revenue generated is spent on the purchase of power, around Rs 2,833.09 crore (73.84 per cent), followed by employee cost (12.86 per cent), operation and maintenance expenses (4.99 per cent) and interest (3.98 per cent) and depreciation (4.34 per cent).

Representatives from KCCI said that there was an urgent need to cap the Transmission and Distribution loss to a reasonable 10 per cent. Further, Mescom has demanded tariff revision at a time when the total demand from the industrial sector is coming down. With the Covid-19 pandemic and lockdowns impacting their cash cycles, MSMEs, the backbone of India’s inclusive growth story, received a significant blow and faced severe bottle-necks and retardations.

Devidas Shettigar from Coastal Iceplant Owners’ Association demanded that the commission announce a special tariff for ice industries operating within 5-km radius on the coast considering it as a seasonal industry. If tariff hike is approved, then the ice plants have to shell out additional Rs 50,000 every month.

MLA Araga Jnanendra alleged that farmers in Sagar, Hosanagara and Theerthahalli taluks failed to get minimum of four hours of power supply in a day. In addition, the quality of power supplied is also poor. "The auto reclosures installed are not functioning effectively in various places. Poor quality electricity poles and TCs are installed. Even the compensation for the electricity mishap are not paid to the victims," he alleged.

Consumer Ramakrishna Sharma said the Mescom should initiate measures to promote LED bulbs. He sought to know why Rs 10,000 are demanded from farmers for new electricity connections.

Sathyanarayana Udupa from Bharathiya Kissan Sangha, Udupi, sought to know whether the hike was necessary when people are affected by the pandemic.

The profit incurred from the reduction of distribution loss has not been passed on to the consumers by the company. He urged the Mescom to install meters for IP sets and to ensure that the government funds are not misused. A SOP (standard operating procedure) on utilising consumer welfare fund should be prepared by the Commission, he added.

The KERC chairman warned officials of Mescom against giving a false picture of company’s accounts.

“Don’t give false picture of company’s accounts to the managing director. We will have to recommend action if you don’t mend your ways,” he warned.

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(Published 20 February 2021, 08:36 IST)

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