Cost of buying electricity from DISCOMs has become costlier for the Commercial & Industrial consumers in the state of Karnataka. Karnataka Electricity Regulatory Commission (KERC) has approved a new tariff for supply of electricity in FY 2014-15. Average increase in tariff is 32 paisa against the 66 paisa increase sought by ESCOMs, tariff increase is ranging from 10 paise to 50 paise per unit for different categories of consumers and is applicable from 1st May 2014.

Industrial consumers will now have to pay extra 35-40 paise per unit of electricity consumed by them.
New opportunities have opened up for those industrial consumers availing or seeking open access, as cross subsidy(CSS) has been reduced, which makes the purchase of power from Independent power producers (IPP, Bilateral contracts) and power exchange(PXs, Bidding for power) more viable option for the consumers giving savings from 20 paise to 50 paise per unit.

Increase in Commercial Tariff:
Commercial consumers comprising of hotels, malls, commercial buildings etc. have to pay extra 40 paisa per unit consumed by them. Commercial consumers are the highest paying consumers and this increase in the tariff is expected to impact them badly.

Being the highest paying consumers, the saving potential for the commercial consumers is high. Sourcing power under open access from IPPs and PXs seems more viable options after decrease in the CSS. Group captive arrangement will still remain most viable option for the commercial consumers where saving potential is up to Rs 1.00 per unit.
Open Access Charges:
KERC has also defined open access charges applicable for the FY 2014-15.
Losses:
Wheeling loss 4.04% and transmission loss 3.81% defined for HT consumers Charges:
Transmission tariff of Rs. 98324/- MW/Month as against the existing tariff of Rs.95442 per MW approved for 2013-14 Wheeling charge:

Wheeling and Banking for Renewable Energy Sources: RE generators wheeling energy to the consumers in the State have existing Wheeling (5 %) and Banking charges (2 %) which is going to continue up to 30.06.2014 or till further orders from commission.

Cross Subsidy

In a nut-shell -
1. Hike in tariff will lead to more consumers eying for open access.
2. With CSS going down, cost of availing OA will come down. Again an added advantage for consumers to opt for OA.