Thiruvananthapuram: The Kerala State Electricity Board Limited may soon adopt dynamic pricing strategy. Kerala Power Minister K Krishnankutty has hinted at levying higher power tariff for consumption of electricity between 6 pm and 10 pm when the demand peaks.
Since it is a policy matter the final decision would be taken only after discussion with the chief minister and other ministers, Krishnankutty stated.
The minister said that the move to charge higher tariff during the specified period is to bring down power consumption during night. The government will ensure that small-scale domestic consumers are not affected by the decision, he added.
The power tariff after 10 pm and during the day can be reduced accordingly, he said.
Explaining the motive of the move the minister said solar power is available only during the daytime. Moreover, the required hydroelectric power is also not available. As a result the state has to procure electricity at the rate of Rs 18 and provide during peak hours.
The central policy makes it mandatory for everyone to install digital meters. Through digital meter, the consumption between 6 pm and 10 pm can be detected and the high rates can be levied accordingly.
The government was considering some relaxation for small-scale units engaged in value-added agri products, Krishnankutty said.
How far will consumers be affected
Already an additional 50 percent tariff is being levied from extra high-tension consumers, low-tension industrial units drawing up to 20 kilovolt (kV) and houses using up to 500 units a month for the peak hour consumption.
Those paying additional tariff for peak hour consumption have been given 25 percent reduction in power tariff. A specially made expensive meter called Time of Day (TOD) meter is being used to calculate the consumption during this particular period.
The consumer categories likely to be adversely affected by government's new move are not known as of now.
The power tariff for a common domestic consumer on an average is Rs 4 per unit. If 50 percent more is levied during peak hours then the tariff would go up to Rs 6 per unit. With this the electricity bill might become hefty.
Power consumption is high in most houses between 6 pm and 10 pm. There would be no gain for consumers even if 25 percent reduction is given during non-peak hours, some experts noted.
What is dynamic pricing
Dynamic pricing is a pricing strategy in which flexible prices are set for products or services based on current market demands. It is also referred to as surge pricing, demand pricing, or time-based pricing.
Power tariff to go up next April
The hike in power tariff for consumers in Kerala for the next five years will be effective from April, 2022.
The Kerala State Electricity Board (KSEB) is planning to ask for 10 per cent hike in power tariff.
The State Electricity Tariff Regulatory Commission has asked the KSEB to submit the tariff petition by December 31. The KSEB is expected to submit the proposal soon.
It was on July 8, 2019 that the KSEB hiked power tariff last time.
Meanwhile, in a big relief to consumers and KSEB, the regulatory commission withdrew controversial clauses on fixation of power tariff slabs from the guidelines given in the draft proposal.
The Regulatory Commission sought different power tariff rates for the KSEB and the 10 supply network license holders such as Thrissur Corporation, Kannan Devan Tea Company, Technopark and the Special Economic Zone.
The KSEB opposed the suggestion tooth and nail, saying it would affect the KSEB's revenue.
The KSEB pointed out that it would also cause reduction in cross subsidy for consumers, leading to a situation where consumers will have to spend more from their pockets for electricity.
Another controversial clause in the draft power tariff proposal was that the KSEB should give extra power produced in the state to high-tension and extra high-tension users in the state instead of selling power to agencies outside the state.