KERC allows escoms to collect govt. portion of PF and gratuity of its employees from consumers

KERC allows escoms to collect 36 paise per unit for pension, leading to power bill increase from April 1.

The Karnataka Electricity Regulatory Commission (KERC) on March 18 issued an order allowing electricity supply companies (escoms) to collect an additional 36 paise per unit from consumers to pay the government portion of the pension and gratuity for Karnataka Power Transmission Corporation Ltd (KPTCL) and escom employees. This will come into effect on April 1, 2025, resulting in the power bills going up.

This comes days ahead of the tariff hike orders for the financial year 2025-26. Bangalore Electricity Supply Company has sought a tariff hike of 67 paise per unit for 2025-26. If KERC approves the same, power consumers in Bengaluru will have to shell out ₹1.03 more per unit from April 1. However, it is to be noted that as against a proposal for tariff hike of 49 paise for 2024-25, KERC ordered reduction in tariffs across various categories.

However, with a majority of residential consumers being covered under the Gruha Jyothi scheme that provides free electricity up to 200 units, they are unlikely to feel the brunt of it. The state Budget has earmarked ₹10,100 crore for the scheme this year, up from ₹9,657 crore last year.

Energy Minister K.J. George blamed the Bharatiya Janata Party for this hike. “Our government has not increased the electricity rates by 36 paise per unit. After the dissolution of the Karnataka Electricity Board and the formation of KPCL and five escoms, the BJP government, for the first time in March 2022, submitted a proposal to the KERC, requesting approval to recover pension and gratuity contributions from customers. However, KERC did not approve the proposal at that time. Amendments were made to the Karnataka Electricity Reform Rules. These changes enabled KPCL and escoms to file a petition with the KERC to recover pension and gratuity contributions from customers,” he said.

“The Federation of Karnataka Chambers of Commerce & Industry had challenged the proposal to recover pension and gratuity contributions from customers in the High Court. However, the High Court rejected this petition on March 25, 2024. Following the court’s order, KPCL and escoms submitted a fresh application to the KERC on November 30, 2024. In response, the KERC has issued its directive,” Mr. George further said.

The KERC order is applicable for three years from 2025-26 to 2027-28. While an additional 36 paise per unit is to be collected for 2025-26, the order enables escoms to collect an additional 35 paise per unit in 2026-27 and 34 paise per unit in 2027-28, towards the “government portion of contribution payable by electricity consumers”. All Escoms put together will be collecting over ₹2800 Crore through this.