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

KERC will assess MESCOM's ₹83.12 crore revenue gap request for 2024-25, amidst consumer calls for cost reductions.

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.

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.