Bengaluru, Nov 14 (KNN) Industries and commercial establishments are strongly  opposing the Karnataka Electricity Regulatory Commission's plan to implement multi-year tariffs (MYT), aiming to provide 'tariff certainty' for consumers, reported TOI.

The Karnataka Electricity Regulatory Commission (KERC) recently released draft guidelines on Multi-Year Tariff (MYT), suggesting upfront tariff adjustments for the next three years. 

The notification emphasizes enhancing transparency in tariff determination and providing consumers with early information about any impending changes. 

The Federation of Karnataka Chambers of Commerce and Industries (FKCCI) said, “Even as many states are yet to adopt MYT, Karnataka is moving towards it without any comprehensive study. The MYT concept, based on certainty over tariff, is a boon. However, given the Centre's directives and subsidy programmes run by the state, MYT will be a burden on the stakeholders."

“In view of the volatility in fuel and power purchase cost adjustments (FPCCA) that are passed on to the customers, certainty over future tariffs is only a mirage. If the draft regulations are enacted without due consideration, it may turn out to be detrimental to consumers. The commission should revise some regulations to align with the provisions of the Electricity Act," FKCCI further said.

An official from the energy department, said, “ KERC determines tariff every year based on the petition filed by Escoms. But with MYT, the likely tariff for the next three years, considered to be a control period, will be determined at the beginning of three years. This will help business establishments and industries plan their consumption."

MG Prabhakar, adviser to the Energy Committee of FKCCI, said: "Escoms are saddling us with FPPCA in keeping with the Centre's directive. These FPPCA charges are so volatile that they keep changing every month. This being the case, where is the certainty on tariffs? The move is based on procedural formalities and does not provide any comprehensive review of the control period. If there are operational inefficiencies due to variations in supply costs, both industries as well as consumers could be affected under MYT."

The FKCCI has underscored the potential impact of subsidy programs on tariffs. While government subsidies, including those for IP sets constituting 37 per cent of energy consumption, align with the 2008 Karnataka Electricity Regulatory Commission Regulations, the MYT guidelines overlook this aspect. 

In case of delayed subsidy disbursement, Escoms may need external borrowing, leading to consumers bearing the financial burden, FKCCI noted.

(KNN Bureau)