Kochi: The proposed move to charge a higher rate for the consumption of power during the peak hours at night has caused unease among the clients of Kerala State Electricity Board Limited (KSEBL). The Board is mulling to introduce surge pricing model in Kerala even as it is raking in profits by selling power outside the state at high margins.
Electricity bills of each household in Kerala will shoot up exponentially if the KSEB decides to hike the charge by 20 per cent for power consumed during the peak hour — 6 pm to 10 pm. If 50 per cent more is levied during peak hours then the tariff would go up to Rs 6 per unit.
The power tariff for a common domestic consumer on an average is Rs 4 per unit.
Power consumption is high in most houses between 6pm and 10pm. There would be no gain for consumers even if 25 per cent reduction is given during non-peak hours, some experts noted.
The other day Kerala Power Minister K Krishnankutty hinted at levying higher power tariff for consumption of electricity between 6pm and 10pm 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.
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.
Isn't KSEB profiteering?
The public utility has been already charging a higher tariff even as it was making crores of rupees by selling power outside. It had sold power to the tune of Rs 161.36 crore even in October, at a time the country was reeling under acute coal shortage that affected the thermal power generation in the country.
Incidentally, the KSEB bought power for Rs 12.05 crore during this period. The Board, which sold power for Rs 65.17 crore till November 17, had to shell out only Rs 39.68 lakh during the same period.
Even in crisis-hit October, the KSEB had to spend Rs 9.58 per unit on an average for a unit. However, the Board has been maintaining that the power was bought for up to Rs 18.
The Board had rarely bought power for Rs 18 a unit.
The KSEB, incidentally, has been the beneficiary of recent excess rainfall in Kerala as more power was produced at its hrdroelectric projects.
KSEB, which sells power outside the state for Rs 3-3.50 per unit during peak hours, charges Rs 9.48 a unit from consumers utilising more than 500 units.
The Board's justification is that it was distributing power, bought for Rs 18 a unit, for a lesser tariff within the State. The power sale is for different windows of 15 minutes each in the power exchange, and price will not be uniform for all time slots. The KSEB does not have the authority to buy or sell power for more than Rs 20 units, even if there is an acute shortage.
It has been pointed out that the discom could charge more per unit of power consumed during night even before installing smart metres. The Board is already charging high tariffs for domestic power consumption more than 500 unit.
The high tariff is being charged under the Time of the Day (TOD) system. The three-phase metres of domestic consumers could calculate TOD usage, and digital metres could be set for this purpose.