BENGALURU: In the coming financial year, consumers will have to shell out more for electricity consumed. But the Karnataka Electricity Regulatory Commission (KERC) terms it a true-up or top-up and not a power tariff revision.
To put it simply, when KERC announced power tariff revision in March 2025, it also decided to freeze the tariffs for three years. But based on market fluctuations and pending arrears to electricity supply companies (Escoms), revisions will be done, but it will be called a top-up.
“This is the first time that Karnataka has adopted this model where power tariff will be uniform for a long term. But top-up or true-up revisions will be done annually,” P Ravi Kumar, KERC Chairman, told The New Indian Express.
Power tariffs are revised once in five years in other states, while Karnataka was the only state that followed an annual revision. From now on, power tariffs will be revised once every three years, and the existing rates will continue till 2027.
“Unlike the power tariff revision, top-ups will be uniform across the board and apply to all Escoms. They are calculated considering multiple factors. The maximum hike will not be more than 8-10 paise per unit,” said another senior KERC official, not wanting to be named.
This financial year, the list of factors include cross-subsidy adjustments which Escoms had sought for 2023 and 2024. It also includes the rise in agricultural subsidy, which the state government anyway bears, but is incorporated while calculating the power tariff.
“The agricultural subsidy has now become a financial burden, and Escoms were asked to reduce it,” said an energy department official. Escoms revised their calculations and submitted a proposal to KERC reducing it to Rs 7.7 per unit from the proposed Rs 8.3.
Also, no fuel adjustment charges were levied in 2025-26. The coal prices were noted to be stable. Thermal power plants experienced a stable coal supply that reduced the import of coal. The year also saw thrust being given to renewable energy, where generation and supply charges are different.
“Calculating all these components, the power cost will be reduced. But there will be no reduction in tariff as the Gruha Jyothi scheme (free power up to 200 units) has to be included. In fact, there will be a rise in tariff this year too. But it will be called a top-up and not a tariff revision,” the KERC official explained.
In March 2025, KERC had reduced the per unit charge for domestic and industrial consumers, but increased the fixed charges by Rs 25. KERC had also imposed an additional 36 paise per unit towards pension and gratuity surcharge (government’s contribution) to energy department employees.