The Kerala State Electricity Board (KSEB) maintains that revision of the electricity tariffs is necessary for its financial sustainability and improving operational efficiency in the coming years.
In its plea filed a few days ago seeking tariff revisions for the 2023-24 to 2026-27 financial years, the KSEB also informed the Kerala State Electricity Regulatory Commission that the revision is key to improving its national-level rating as well.
With the term of present tariffs ending on March 31, the KSEB has approached the commission with proposals to raise the electricity tariffs by 40.64 paise in 2023-24, 31 paise in 2024-25, 16.77 paise in 2025-26, and 1 paise in 2026-27.
Revising the tariffs is essential for bridging the revenue gap and improving the operational efficiency and financial sustainability of the KSEB through the centrally assisted Revamped Distribution Sector Scheme (RDSS), according to the KSEB.
RDSS aims to enhance the quality, affordability, and reliability of power supply through a ‘‘financially sustainable and operationally efficient’‘ distribution sector. Among other things, the ₹1,0475.03-crore scheme for Kerala seeks to reduce the gap between the average cost of supply and aggregate revenue requirement of discoms to zero by 2024-25.
Financial sustainability is an important criterion for better rankings at the national level for discoms. At the 10th integrated rating of discoms, the KSEB could make only a ‘C,’ with the Ministry of Power making the criteria more stringent by giving 75% of weightage for financial sustainability, according to the KSEB.
The utility says it lost marks due to the absence of tariff orders in 2020-21 and 2021-22 and other factors, including failure to adjust the fuel surcharges on time.
