Dues of boards must be cleared; electricity rates may rise sharply across India

THIRUVANANTHAPURAM: With the Supreme Court directing that the dues of electricity boards of various states be cleared, electricity rates across the country may rise sharply. The respective state electricity regulatory commissions will have to decide whether the rate hike should be done all at once or in phases.

The Supreme Court has directed that a time-bound plan be prepared to increase the electricity rates of commercial and industrial consumers in a way that does not impose a huge burden on domestic consumers. The observation is that political interference is putting the electricity boards and the regulatory commission in crisis.

The total liability of various state electricity boards across the country is Rs 1.5 lakh crore. Tamil Nadu has the highest amount, Rs 87,000 crore, followed by Delhi, Rs 20,000 crore. In both cases, the board was trapped by the state governments' insistence on unlimited electricity tariff concessions. The government did not provide any assistance accordingly. Kerala has a liability of Rs 6600 crore. This occurred between 2011 and 2017. At that time, the government intervened to prevent the increase in electricity tariffs, and the board had to work without being able to make up for the losses.

The average increase per unit of electricity in the state of Kerala was 16 paise last year and 12 paise this year. KSEB and the Kerala Electricity Regulatory Commission will jointly decide how much tariff increase should be imposed on each party and for how long to clear the liability of Rs 6600 crore.