Kerala: Panel treats EB with kid gloves

Thiruvananthapuram: Industrial consumers have taken strong exception to the increased operational and maintenance costs, especially employee costs, that KSEB Limited has been allowed under the Draft State Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations, 2017. During the public hearing conducted by the Electricity Regulatory Commission here on Wednesday, industry representatives said that if the increase was confirmed it could push up power tariffs by at least 75 paise per unit.

The argument of the HT and EHT Consumers' Association is that the draft regulations have increased employee expenses for 2016-17 and 2017-18 by Rs 752 crore and Rs 773 crore, a swell of 61.6 percent and 57.8 percent. If the other repair and maintenance costs are included, the total increase in O&M expenses are Rs 778.87 crore and Rs 798.73 crore, together causing an increase of Rs 1557.60 crore. "If this is sanctioned, it will be passed on to consumers and tariffs will go up between 75 paise to 80 paise per unit," said A. R. Satheesh, senior associate vice-president of Carborundum Universal Limited.

“A reasonable person would definitely suspect that the true intention behind the convoluted methodology used to arrive at the revised norms is nothing but a ploy to allow the unjustifiable and exorbitant employee expenses to be passed through in tariff onto hapless consumers,” a representative of the HT and EHT Association said.

The government, too, had officially registered its objection. Here is what Dr K. M. Abraham, when he was additional chief secretary (finance), had put on record: "While, it is important to reward employee with a good compensation package, there are components in the package that should have been curtailed to reasonable levels. Distributing largesse based on such an LTA comes at a cost – as this translates into an extra burden for the consumers."

However, KSEBL denies that its employee costs are inflated. “In fact, the new regulations have allowed just 50 percent of the actual,” said B. Pradeep, a senior KSEB engineer.