THIRUVANANTHAPURAM: High Court blocked the usual strategy of increasing electricity rates to compensate for cost overruns caused by mismanagement and huge salary hikes. The temporary stay comes as the KSEB is set to issue an order this week to increase rates by 25 paise to 80 paise per unit.

High Tension, Extra High Tension Electricity Consumers Association, an organization of industrial consumers, approached the High Court. The rate should not be increased until the case is heard again by Justice CS Dias on July 10.

The Regulatory Commission's evidence collection on the board's request to increase the rate was completed on May 16. The current tariff period will end on June 30. The court intervention comes when the increase was going to be effective from July 1. The CAG report had said that the KSEB had incurred huge debt after increasing the salary in 2021 without the government's approval. The loss is made up by increasing the rate every year. The CAG had suggested that there was no justification for paying huge salaries over what other employees were getting and that the government should intervene.

78 million units of electricity are supplied to the people every day. Out of this, production is 15 million units. The rest comes from the central grid at low rates and through long-term contracts at lucrative rates. If more than this has to be bought, the cost will be charged as a surcharge in the next month. In this case, there is no loss through the power supply. Along with the salary increase, the mismanagement of the pension fund also caused losses.

Pension fund mismanagement

• The board gives pensions to 40,000 people. 240 crore monthly expenses. 35,824 crore liability.
• Provision was made in 2013 for the formation of Employees Master Pension and Gratuity Trust.
• At that time the liability was 7584 crores. It was decided that 35% of this would be borne by the government and 65% by the board.
• Based on this, the government gave concession on the amount collected as duty, for a period of 10 years
• This, along with the Rs 7,060 crore debenture money to meet the board's share, did not reach the pension fund.

Central policy and tribunal order not complied with

• The petition is against the tariff being fixed by calculating the average cost of distribution.
• The provisions of the Electricity Act, 2003 and the Tariff Policy of the Center are not considered.
• The tariff is to be determined by calculating the cost of supply on a voltage basis.
• The order of the Appellate Tribunal to reduce the cross-subsidy has also not been complied with.
• It has been stated in the petition that the Supreme Court has directed to implement the order.

Additional liability on salary increment: 543 crores

Amount to be raised by the unit to meet the salary liability: 31 paise