Bengaluru Faces Power Tariff Hike as Bescom Grapples with Massive Financial Losses
The Bangalore Electricity Supply Company (Bescom) has incurred staggering losses of ₹2,803 crore during the 2024-25 financial year, primarily due to escalating power purchase costs. To address this substantial deficit, the Karnataka Electricity Regulatory Commission (KERC) has approved a tariff increase that will impact millions of consumers across eight districts served by the utility.
Revised Tariff Structure and Implementation Timeline
Starting from the first meter reading after May 1, 2026, electricity consumers will pay an additional 56 paise per unit for a full year, until April 30, 2027. This adjustment is designed to spread the financial burden evenly over twelve months, minimizing sudden shocks to household budgets. The charges are specifically pegged to consumers' actual electricity usage during the 2024-25 period, ensuring that those who consumed more power bear a proportionate share of the recovery costs.
Important Exemption: Households covered under the Gruha Jyothi scheme, which provides zero-payment bills up to a certain consumption limit, will not be affected by this tariff revision. However, consumers who exceed their monthly free unit allocation under this scheme will need to pay the revised charges on their regular electricity bills.
Root Causes of Bescom's Financial Strain
According to Bescom's annual performance review submitted in November 2025, multiple factors converged to create this financial crisis:
- Domestic Tariff Restructuring: The shift from a slab-based system to a uniform rate of ₹5.90 per unit resulted in significant revenue loss from high-consuming households. Approximately 65% of domestic consumers fall into the above-100-unit consumption category, and the reduction from ₹7 to ₹5.90 per unit alone contributed to losses of ₹1,213 crore, accounting for 43% of the total deficit.
- Industrial and Commercial Reductions: The decision to lower energy charges for industrial and commercial consumers by an average of 75 paise per unit further eroded Bescom's revenue streams.
- Agricultural Demand Surge: Poor rainfall during 2024-25 led to increased electricity consumption for irrigation pumps, exceeding approved levels by 2,500 million units. Since this segment receives heavy subsidies, the additional usage deepened Bescom's financial burden.
- Energy Mix Challenges: Increased reliance on thermal energy, which is more expensive than hydro and renewable sources, also negatively impacted the company's financial position, as confirmed by a Bescom engineer.
Contrasting Fortunes: Refunds for Other Karnataka Zones
While Bescom consumers face higher tariffs, electricity consumers in other parts of Karnataka will receive marginal refunds based on their 2024-25 usage patterns. KERC has directed electricity supply companies (escoms) to refund excess charges collected during that period:
- Mysuru Zone: Consumers will receive the highest refund at 15 paise per unit.
- Hubli and Gulbarga Zones: Consumers will get refunds of 10 paise per unit each.
- Mangaluru Zone (Mescom): Consumers will receive a refund of 9 paise per unit.
These refunds highlight the regional disparities in electricity supply economics across Karnataka, with Bescom's service area facing particularly severe financial challenges.
The KERC has emphasized that the deficit recovery must strictly come from consumers who were active during the 2024-25 period, ensuring fairness in the tariff adjustment process. This move underscores the complex balancing act between maintaining affordable electricity for consumers and ensuring the financial viability of power distribution companies in an era of rising energy costs.
