Karnataka Lowers Retail Electricity Tariff for C&I Consumers

Tariff for industrial and commercial consumers is reduced by 6.8% and 13.5% respectively


The Karnataka Electricity Regulatory Commission (KERC) has reduced the retail electricity tariff for commercial and industrial (C&I) consumers of high tension (HT) categories in the financial year (FY) 2024-25 in a bid to retain customers resorting to private power purchases.

The retail tariff for industrial consumers was lowered by 6.8% to ₹6.90 (~$0.083)/kWh, while the tariff for commercial consumers was reduced by 13.5% to ₹8 (~$0.096))/kWh. The revised tariff will be applicable from April 1, 2024.

Karnataka Retail Tariff

KERC noted a decline in HT consumption in FY 2022. This was attributed to increased purchases for irrigation pump (IP) sets. As a result, HT consumers bore the cost, prompting tariff hikes. Consequently, many HT consumers began opting for private purchases, leading to grid defections. The reduction in the tariff aims to reverse this trend.

Green Energy Tariff

KERC, in its tariff order, has continued the existing green energy tariff of ₹0.50 (~$.0.006)/kWh as an additional tariff over and above the normal tariff to be paid by the HT-consumers who opt for the supply of green power.

The Commission had proposed separate fixed charges for open-access consumers due to the under-recovery of fixed costs incurred by distribution companies. However, stakeholders opposed this proposal, citing discrimination between two sets of consumers and the provisions of the Electricity Act, 2003.

Consequently, KERC decided against separate fixed charges but continued to impose an additional surcharge to ensure full fixed charge recovery from open-access consumers.

KERC also set a wheeling charge of ₹0.32 (~$.0.004)/kWh for Bangalore Electricity Supply Company (BESCOM). It also set a cross-subsidy charge of ₹0.55 (~$0.007)/kWh and ₹2.46 (~$0.029)/kWh for industrial and commercial consumers in the state, respectively.

The Commission had increased the average retail electricity tariff for all low-tension and HT categories by 8.31% FY 2023-24.

In January, KERC released a draft proposal to allow peer-to-peer solar energy trading in the state using blockchain technology whereby electricity consumers can become ‘prosumers’ by installing rooftop solar modules and selling excess power generated to consumers directly.