KSEB seeks big tariff hike. If accepted, monthly tariff of lower income households will rise by Rs 70-130

The Kerala State Electricity Board (KSEB) has sought a 5-15 per cent increase in power tariffs and a 43-167 per cent increase in fixed charges across various slabs for domestic consumers from the next fiscal, 2022-23.

The power utility wants the new tariffs from April 1, 2022, when the validity of the existing tariffs will expire.

The minimum tariff, applicable for those using 0-40 units a month, will be retained at 1.50 per unit.

The maximum rate, reserved for large households consuming more than 500 units a month, will be increased from Rs 7.90 to Rs 8.30 a unit.

The proposed increase would hike domestic tariffs in various consumption slabs from Rs 30 to Rs 850 a month.

The proposed rates were laid out in the petition KSEB Limited (KSEBL) had filed before the Kerala State Electricity Regulatory Commission.

In addition, KSEBL wants annual tariff increases till 2026-27. 

The tariff hike has been sought to plug the utility's widening revenue gap, which for 2022-23 is estimated to be Rs 2852.58 crore.

Middle-income tariffs

Nearly 85 per cent of the over one crore domestic consumers in Kerala use between 0 and 250 units a month.

Within this consumption spectrum, there are six tariff slabs: 0-40 units, 0-50, 51-100, 101-150, 151-200 and 201-250.

And among these, KSEBL has proposed the highest increase in the 51-100 and 101-150 consumption slabs, within which falls 53.78 per cent of total domestic consumers in Kerala, mostly 'low middle' and 'middle' income households.

In the 51-100 slab, under which falls 29.15 per cent of the total domestic consumers in Kerala, KSEBL has proposed an increase from the existing Rs 3.70 to Rs 4.10 per unit, a 10.8 per cent increase.

The maximum monthly increase in this slab, including the fixed charge, would be Rs 63.

In the 101-150 slab, which has 24.63 per cent of the domestic consumers, the tariff is proposed to be revised from Rs 4.80 to Rs 5.50 per unit, a nearly 15 per cent hike.

The maximum monthly increase in this slab, including the fixed charge, would be Rs 128.

The 101-150 slab is taxed higher because this slab, though it has less number of consumers than the 51-100 slab, accounts for the largest consumption in the domestic category, 28.77 per cent of the total domestic consumption.

The 51-100 slab, even if it has more consumers, accounts for a relatively lower 21.25 per cent of the total consumption.

Rich man's tariffs

Consumption up to 250 units is charged telescopically, meaning the lower units of consumption will be charged at the rate of the lower slabs.

Say for instance a household has consumed 210 units. When the tariff is calculated, the first 50 units will be charged at Rs 3.50 per unit, the second 50 units from 51 to 100 will be charged at Rs 4.10 per unit and so on.

The benefit of telescopic charges ends at 250 units. Beyond 250 units, non-telescopic charges kick in.

Instead of incremental rates, a flat rate will be used to calculate the tariff. Say a household has consumed 260 units a month.

In this case, the single rate fixed for the 0-300 units slab will be used uniformly to calculate the tariff.

Non-telescopic charges are applied in five slabs: 0-300, 0-350, 0-400, 0-500 and above 500.

However, less than 5 per cent of the total domestic consumers fall under these five slabs.

The fixed charges have mostly been doubled for both single and three-phase consumers. Over 75 per cent of KSEBL's total energy sales are to domestic consumers.


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