KSERC to Hold Hearing on Proposal to Remove 10 Paise Cap on Surcharge, Raising Concerns for Consumers
In a move that could have significant implications for electricity costs in Kerala, the Kerala State Electricity Regulatory Commission (KSERC) has proposed a major amendment to tariff regulations that would remove the existing 10 paise per unit ceiling on fuel surcharge recovery. The Commission has scheduled an online public hearing for December 23, 2025, to discuss the draft amendment regulations, which have sparked concerns among consumers and stakeholders.
The proposal, if implemented, would enable the Kerala State Electricity Board Limited (KSEB Ltd), the distribution licensee, to recover fuel surcharges strictly as per the approved formula, without being constrained by the existing 10 paise ceiling. This would allow the board to recover actual fuel costs, potentially improving its financial position during periods of high fuel costs.
However, the removal of the 10 paise ceiling could also result in higher electricity bills for consumers during periods when fuel and power purchase costs exceed the current ceiling limit. The actual impact would depend on market conditions and the actual fuel surcharge requirements in any given month. Consumers would face variable surcharges rather than a predictable maximum charge.
The KSERC's proposal operates within the context of the Electricity Act, 2003, and related supply codes. The Commission has the authority to determine tariff structures and conditions for electricity distribution in Kerala. According to KSERC's analysis, a month-wise computation of fuel surcharge for the period from June 2023 to December 2025 reveals that the actual surcharge requirement exceeded 19 paise per unit in only two months: October 2023 and November 2025. In all other months during this period, the surcharge remained at or below the 10 paise level that was being recovered.
The Commission's position is that continuation of the ceiling limit is no longer necessary given the historical data showing that actual surcharge requirements have only occasionally exceeded the 10 paise ceiling. Rather than relying on a fixed ceiling, KSERC proposes to safeguard consumer interests through enhanced transparency and annual "Truing up" petitions. These mechanisms would allow for periodic review and adjustment of charges based on actual costs incurred, theoretically preventing excessive overcharging while allowing for cost recovery when necessary.
The removal of the 10 paise ceiling has significant implications for consumers and the electricity board. If implemented, it would enable the board to recover actual fuel costs, potentially improving its financial position. However, it would also mean that consumers would face variable surcharges rather than a predictable maximum charge. The actual impact on consumers would depend on market conditions and the actual fuel surcharge requirements in any given month.
The public hearing scheduled for December 23, 2025, provides an opportunity for stakeholders to provide feedback on the proposal. Consumers and stakeholders are invited to register for the hearing before December 20, 2025, through the Commission's registration portal.
In conclusion, the KSERC's proposal to remove the 10 paise cap on surcharge has significant implications for electricity costs in Kerala. While it could improve the financial position of the electricity board, it also raises concerns among consumers who face variable surcharges rather than a predictable maximum charge. The outcome of the public hearing will determine the future of the proposal and its impact on consumers and the electricity board.
The Commission's decision to hold a public hearing reflects its commitment to transparency and stakeholder engagement. However, the removal of the 10 paise ceiling also raises questions about consumer protection and the potential for excessive cost recovery. The outcome of the public hearing will shape the future of electricity costs in Kerala and determine the fate of the proposal.
The proposed amendment regulations would have a significant impact on the lives of millions of consumers in Kerala. The removal of the 10 paise ceiling would enable the electricity board to recover actual fuel costs, potentially improving its financial position. However, it would also mean that consumers would face variable surcharges rather than a predictable maximum charge.
The actual impact on consumers would depend on market conditions and the actual fuel surcharge requirements in any given month. Consumers and stakeholders are invited to participate in the public hearing to provide feedback on the proposal and shape the future of electricity costs in Kerala.
The KSERC's proposal to remove the 10 paise cap on surcharge is a significant development in the context of electricity costs in Kerala. It reflects the Commission's commitment to transparency and stakeholder engagement. However, it also raises concerns among consumers and stakeholders who are invited to participate in the public hearing to provide feedback on the proposal.
The outcome of the public hearing will determine the fate of the proposal and its impact on consumers and the electricity board. The Commission's decision to hold a public hearing reflects its commitment to transparency and stakeholder engagement. However, the removal of the 10 paise ceiling also raises questions about consumer protection and the potential for excessive cost recovery.
The proposed amendment regulations would have a significant impact on the lives of millions of consumers in Kerala. The removal of the 10 paise ceiling would enable the electricity board to recover actual fuel costs, potentially improving its financial position.
The actual impact on consumers would depend on market conditions and the actual fuel surcharge requirements in any given month. Consumers and stakeholders are invited to participate in the public hearing to provide feedback on the proposal and shape the future of electricity costs in Kerala.
The KSERC's proposal to remove the 10 paise cap on surcharge has significant implications for electricity costs in Kerala. While it could improve the financial position of the electricity board, it also raises concerns among consumers who face variable surcharges rather than a predictable maximum charge.
The outcome of the public hearing will determine the fate of the proposal and its impact on consumers and the electricity board. The Commission's decision to hold a public hearing reflects its commitment to transparency and stakeholder engagement.
The proposed amendment regulations would have a significant impact on the lives of millions of consumers in Kerala. The removal of the 10 paise ceiling would enable the electricity board to recover actual fuel costs, potentially improving its financial position.
The actual impact on consumers would depend on market conditions and the actual fuel surcharge requirements in any given month. Consumers and stakeholders are invited to participate in the public hearing to provide feedback on the proposal and shape the future of electricity costs in Kerala.
The KSERC's proposal to remove the 10 paise cap on surcharge has significant implications for electricity costs in Kerala. While it could improve the financial position of the electricity board, it also raises concerns among consumers who face variable surcharges rather than a predictable maximum charge.
The Commission's decision to hold a public hearing reflects its commitment to transparency and stakeholder engagement. However, the removal of the 10 paise ceiling also raises questions about consumer protection and the potential for excessive cost recovery.
The outcome of the public hearing will determine the fate of the proposal and its impact on consumers and the electricity board. Consumers and stakeholders are invited to participate in the public hearing to provide feedback on the proposal and shape the future of electricity costs in Kerala.
📰 Source: The Hindu - National
