Karnataka Electricity Regulator Extends Discounted Power Scheme Amid Tariff Revisions
Bengaluru: In a move offering partial relief to commercial and industrial consumers grappling with successive electricity tariff hikes, the Karnataka Electricity Regulatory Commission (KERC) has announced the continuation of the Discounted Energy Rate Scheme (DERS) for two additional financial years. This decision, issued in a recent order, introduces key modifications, including the inclusion of open access consumers, while drawing criticism from trade bodies for its perceived discriminatory design.
Scheme Extension and Key Modifications
The commission's order, released on Tuesday, extends DERS—initially launched in 2021 for high-tension (HT) installations and later expanded to certain low-tension (LT) categories—through 2026-27 and 2027-28. This extension follows a request from the Bangalore Electricity Supply Company (Bescom), which sought to prolong the scheme and incorporate open access consumers. Previously, open access consumers were required to relinquish their wheeling arrangements to benefit from DERS, but the revised framework now allows their participation across various categories, such as HT-2(a) industries, HT-2(b) commercial installations, HT-3(a) commercial lighting and heating, and LT-5 temporary users.
However, the commission has imposed restrictions: open access consumers will be excluded from certain incentives, notably the additional 20% contract demand without penalties for exceeding sanctioned loads. The order also clarifies the calculation of base consumption for new participants, specifying that it will be based on the average monthly usage from 2024-25 and 2025-26, or a minimum of six months' data if continuous records are unavailable.
Partial Exemptions and Industry Criticism
Existing DERS participants have been granted partial exemptions from the new conditions, particularly regarding previously contracted open access power, but they will not qualify for the 20% demand-related incentives. While electricity supply companies (Escoms) promote the scheme as beneficial for boosting industrial and commercial activity, trade organizations like the Federation of Karnataka Chamber of Commerce and Industries (FKCCI) have labeled it "discriminatory."
An energy consultant from FKCCI's Energy Committee explained that prior to DERS, a special incentive scheme provided a Re 1 per unit discount for consumption above base levels during off-peak hours (10 am to 6 pm) year-round, benefiting sectors such as cement, steel, and fabrication. In contrast, DERS is limited to the monsoon or off-season from June to December, leveraging surplus energy. Critics argue that this shift withdraws more advantageous incentives introduced in earlier tariff revisions, undermining sectoral benefits.
FKCCI officials further contended that DERS incentivizes increased consumption at flat or discounted rates, whereas Time-of-Day (ToD) tariffs—which differentiate pricing across peak, off-peak, and solar hours—enable better load management for Escoms based on power availability. This debate highlights ongoing tensions between regulatory efforts to balance utility revenues and consumer demands for fair, consistent pricing structures.
