Steep hike in Kerala power tariff

The Kerala government yesterday announced steep hike in power tariffs across the board for domestic and industrial customers.

"We have no option but to take this step in order to avoid a power breakdown in the state," Chief Minister A.K. Antony announced yesterday after the weekly cabinet meeting.

The tough decision to hike the tariff had been postponed a couple of times, with the government apparently not wanting to take the decision during the Onam season.

The decision means that there will be a thermal surcharge of 50 paise per unit for all consumers across the board, besides which there will be what the government calls the rationalisation of power tariff.

The details of the formula to calculate the new rates were not immediately known, but power rates for the domestic sector in the higher slabs of consumption are expected to nearly double.

Power Minister Kadavoor Sivadasan said the Kerala State Electricity Board (KSEB) was facing tough times financially, and that the KSEB was running losses of Rs1 billion each month.

The thermal power that is being sourced from the National Thermal Power Corporation is expected to cost an additional Rs820 million per month, and the tariff hike is expected to help KSEB retrieve approximately Rs750 million of the additional expense.

Industry Minister P.K. Kunhalikutty was reported to have strongly opposed the idea of hiking the power tariff for industrial units, pointing out that another hike would make Kerala an unattractive destination for industries.