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Home KSEB KSEB seeks cross subsidy surcharge to avoid burden on domestic consumers

KSEB seeks cross subsidy surcharge to avoid burden on domestic consumers

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KSERCWith the open access issue reaching a flashpoint, the Kerala State Electricity Board (KSEB) has decided to press for cross subsidy surcharge and additional subsidies to prevent, what top officials of the power utility term, additional financial burden on domestic consumers.

The KSEB will present its case strongly at a hearing planned by the Kerala State Electricity Regulatory Commission on the issue on August 19, it is understood. Open access - a provision which allows electricity consumers to buy power from any supplier and use, in the Kerala context, the KSEB's transmission facilities to bring it home - has caused a lot of bad blood between the KSEB and the Commission over the past few weeks.

In July, the KSEB denied access to the 15 consumers - all industries and members of the Kerala HT/EHT Industrial Electricity Consumers' Association - who were using open access sparking off protests. At a hearing last week, the Commission instructed the KSEB to allow open access by August 6, but continued to be mum on the latter's demand for cross subsidy. Anyhow, the KSEB issued orders re-allowing open access to the consumers on Saturday.

However, KSEB officials stress that cross subsidy, in the event of allowing open access, should be allowed under provisions of the Electricity Act 2003. As per open access regulations, high-end consumers who avail of open access must pay a cross subsidy surcharge to the power utility so that it can continue to supply power at cheaper rates to the financially weaker consumer groups. Industrial consumers, though comprising just 1.24 per cent of the KSEB's 1.16 crore consumers, account for 24 per cent of the KSEB's energy sales, and thus, a major chunk of its tariff revenue. Losing these consumers to competitive prices in the open access system means massive financial loss to the KSEB. The crux of the KSEB's argument lies in the fact that if cross subsidy is not allowed, power tariff for domestic consumers would have to be hiked.

When contacted, N S Pillai, Director (Finance), KSEB, said the power utility will press for cross subsidy and additional subsidy in lieu of allowing open access.

Source- Indian Express


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