The State Electricity Regulatory Commission has reminded the Kerala State Electricity Board (KSEB) that it should make “earnest efforts” to collect the long-pending power bill arrears.
The reminder came in the Commission’s recent interim order revising the power tariffs in the State for an eight-month period. In its order, the Commission said that the KSEB and other power distribution licensees must take earnest efforts for the prompt collection of electricity charges and also for collecting the long pending arrears of KSEB.
“Otherwise, it may affect the financials of the licensees and resort to additional borrowings to meet the revenue expenditure. The Commission shall not approve the interest incurred for the loans availed for meeting the revenue expenditure,” the Commission headed by T. K. Jose said.
Power bill arrears of various categories of consumers had mounted to ₹3,585.69 crore as on June 30 this year, resulting in the KSEB drawing flak from consumer groups at the public hearings held by the Commission ahead of the tariff revision.
Several consumers and organisations had objected to hiking the power tariffs without ensuring the recovery of the accumulated arrears.
The Commission said it determines the tariffs strictly on the basis of the approved revenue gap in the agggergate revenue receipts (ARR) and truing-up process of the KSEB finances.
“The KSEB has been following the accrual system of accounting. Under the accrual system, when an invoice for electricity charges is issued to the consumers, it is accounted as revenue irrespective of whether it is collected or not since the Commission is also approving the ARR and truing up based on the accounts of KSEB. The ARR and revenue gap is arrived on the presumption of 100% revenue realisation without arrears,’‘ the order noted.
Meanwhile, the Finance Department has given its approval for opening an escrow account for settling the electricity charges of the Kerala Water Authority (KWA), the single biggest defaulter on the KSEB list. After the arrears of low tension (LT) and high-tension/extra high-tension (HT/EHT) consumers touched ₹3,260.09 crore in March, the KSEB had announced a one-time settlement scheme for defaulters. The OTS scheme is currently open.
