KPTCL seeks hike in transmission charges

Funds for Rs 2,700 cr capex towards upgradation

The Karnataka Power Transmission Corporation Limited (KPTCL) has proposed a 34 per cent hike in transmission charges. KPTCL on Wednesday submitted the request to the Karnataka Electricity Regulatory Commission (KERC) to meet the proposed capital expenditure of Rs 2,700 crore in 2006-07 towards system upgradation.

The Escoms (Electricity Supply Companies) will have to study the implications of this and see if they also need to seek a tariff hike, which might have an impact on the consumers.

KPTCL is its submission has proposed to recover 26.06 paise per unit over the entire energy of 38,057 million units as against the present 19.42 paise per unit. This, KPTCL said, includes advance against depreciation, 50 per cent of the SLDC (state level dispatch centre) charges of KPTCL's portion along with its projected transmission expenditure for the ensuing year.

Justifying the need for the increase, KPTCL said: "We are proposing a capital investment programme of Rs 2,700 crore for FY'07 to strengthen transmission in the state. The transmission loss has been retained at the level of 4.18 per cent as approved by KERC for FY'06 since the scope for reduction in transmission losses is less with the handling of more energy and the transmission loss level in the state is at a minimum level."

The state-owned firm also proposes the same level of transmission expenditure except with regard with depreciation, interest and finance charges, and return on equity.

"We have proposed to recover 14 per cent RoE instead of 12 per cent approved by KERC for the present year. We also propose to recover a higher interest and finance charges in view of the increased level of capital expenditure in the ensuing year," Bharat Lal Meena, MD, KPTCL said.

Said an industry analyst on the proposal: "Due to a good monsoon in the state over the last year, KPTCL and the Escoms weren't allowed the hike they demanded in the recent tariff order by KERC. They are now taking up a system upgradation programme and part of the expenditure is being met by the APDRP (accelerated power development and reforms programme) and with the proposed hike they intend to bridge the gap."

"However, one aspect which is still grey is the that of ensuring proper supply to consumers even after the capex. There is no guarantee on this and KERC should look into this aspect before giving the nod for the proposal."

KPTCL has also added that the annual revenue requirement for FY'07 of Rs 991.74 crore includes 14 per cent RoE, 50 per cent SLDC charges of transmission utility and advance against depreciation.