KERC to examine MESCOM’s plea to make good ₹83.12 revenue gap for 2024-25

The Karnataka Electricity Regulatory Commission (KERC) on Wednesday, February 18, said it will examine Mangalore Electricity Supply Company’s (MESCOM) request to true-up a revenue deficit of ₹83.12 crore for 2024-25 against the Commission-approved revenues.

Winding up a public hearing on the annual performance review (APR) of MESCOM for 2024-25, Commission chairman P. Ravikumar said the company’s performance during the year was far better. There would be no increase in the power tariff for three years, from 2024-25 to 2027-28 as fixed by the Commission, he added.

During the APR, MESCOM claimed that it suffered a revenue deficit of ₹83.12 crore and sought a suitable order from KERC to bridge the gap.

MESCOM managing director R. Jayakumar said KERC had approved the power purchase cost at ₹3,957.57 crore for 2024-25; the actuals, however, stood at ₹4,472.94 crore. KERC had approved ₹5,291.33 crore towards total expenditure; the actuals, however, stood at ₹5,751.24 crore.

As against the annual revenue requirement (ARR) of ₹5,095.79 crore approved by KERC, the actual requirement for 2024-25 stood at ₹5,913.5 crore. Even after MESCOM improved its tariff revenue to ₹5,830.38 crore, there remained a deficit of ₹83.12 crore, the managing dirctor explained and justified the plea for truing up the deficit.

Alleges corruption

Objecting to MESCOM’s plea to true-up the deficit, Araga Jnanendra, Tirthahalli MLA, alleged that the company appeared to be indulging in corrupt practices. Providing data for 2021-22, which showed that the company paid inflated rates for concrete electricity poles, the former Minister questioned how MESCOM was able to negotiate a higher value when the bidder had quoted lower value.

While the lowest bidder had quoted ₹4,750 per pole, MESCOM negotiated it to ₹5,186 per pole. In the retail market, similar poles were available for ₹3,885, he said, adding that Gulbarga Electricity Supply Company (GESCOM), during the same time period, had bought poles at ₹4,282. Over one lakh poles were procured by MESCOM during the year, Mr. Jnanendra said, alleging huge corruption. Had there been prompt purchases, the company would have been earning good profits without seeking tariff hikes now and then, he said.

He further noted that consumers were urging the Commission to deny MESCOM’s demand and instead ask the company to reduce administrative costs.

Raising a technical issue, Mr. Ravikumar said the hearing pertained to MESCOM’s performance in 2024-25. Mr. Jnanendra also chided MESCOM for burdening consumers with paying the pension of its retired staff.

Farmer leader Satyanarayana Udupa called for the metering of irrigation pump sets to accurately determine farmers’ actual water usage.

Mr. Ravikumar further stated that the Commission would publish draft amendments to the Conditions of Supply (CoS) for electricity distribution licensees in a month to simplify the process.