The Karnataka Appellate Tribunal has admitted a petition filed by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) challenging the tariff revision by the Karnataka Electricity Regulatory Commission (KERC) for industrial and commercial consumers. The revision led to a retrospective hike in power charges for the period between April 2025 and February 2026, causing financial strain on businesses across the state.
Background of the Tariff Revision
In early 2025, KERC announced a revision in electricity tariffs for industrial and commercial establishments, citing rising operational costs and the need to maintain grid stability. The revised rates were applied retrospectively from April 2025, meaning consumers were billed higher amounts for power already consumed. This move drew sharp criticism from industry bodies, which argued that retrospective tariff hikes were arbitrary and violated principles of fair regulation.
FKCCI's Legal Challenge
The FKCCI, representing over 5,000 industrial and commercial members, filed a petition before the Karnataka Appellate Tribunal, seeking to quash the tariff revision. The association contended that the KERC had not provided adequate justification for the retrospective application and had failed to follow due process. The FKCCI also highlighted that the sudden increase in power bills had adversely affected the cash flow of small and medium enterprises, many of which were still recovering from the economic slowdown.
Tribunal's Decision
On May 26, 2026, the tribunal admitted the petition and issued notices to the KERC and the state government, seeking their responses. The tribunal also granted interim relief by directing that no coercive action be taken against the FKCCI members for non-payment of the revised tariffs until the next hearing. The next hearing is scheduled for June 15, 2026.
Implications for Industries
The tariff revision had a significant impact on industries, particularly in sectors such as manufacturing, textiles, and information technology. Many businesses reported a 15-20% increase in their electricity bills, forcing them to either absorb the costs or pass them on to consumers. The FKCCI argued that the retrospective revision was illegal and that the KERC should have conducted a proper consultation process before implementing such changes.
KERC's Stand
The KERC has defended its decision, stating that the revision was necessary to cover the increased cost of power procurement and to ensure the financial viability of power distribution companies. The commission also maintained that the retrospective application was justified due to delays in the tariff-setting process.
Way Forward
With the tribunal's admission of the petition, the FKCCI has won the first round of the legal battle. However, the final outcome will depend on the tribunal's ruling after hearing all parties. Industry bodies across Karnataka are closely watching the case, as it could set a precedent for future tariff revisions in the state.
