KOCHI: The Kerala State Electricity Board Ltd (KSEB), which has imposed multiple tariff hikes in less than two years, may have to continue doing so until it recovers the Rs6,408.34 crore it has already spent and logged as regulatory assets to be recovered from the consumers.
KSEB is now carrying regulatory assets totalling Rs 6,408.34 crore as of March 31, 2024 as receivables, and continues on the balance sheet unchanged into 2025 too. These regulatory assets arise when the utility’s expenses are allowed to exceed its revenues, typically due to mismatches in tariff orders and approvals.
Under Kerala’s cost‑plus tariff regime, KSEB is entitled to recover these deferred expenses- assets, through future rate hikes approved by the Kerala State Electricity Regulatory Commission (KSERC) – a path that ultimately pinches the pockets of consumers.
Tariff hikes down the line
Consumer watchdogs warn that this Rs 6,400 crore liability hangs over electricity users like a sword of Damocles. Every deferred cost means tariff increases down the line, raising fears of more frequent, heavier hikes – especially when KSEB files for rate revisions like the 4.45 per cent increase proposed in September 2024 to raise Rs 812 crore, along with a summer surcharge and time-of-day pricing proposals.
As part of the multi-year tariff (MYT) 2023–27 tariff proposals, KSEB sought to collect over Rs1,834 crore over two years through periodic hikes and summer tariffs (an extra 10 paise per unit January–May), though KSERC approved only a fraction of the total request from KSEBL.
Consumer groups contend that regulatory assets reflect KSEB’s unchecked spending and unrealistic cost projections.
“These deferred costs get dumped on households through silent tariff hikes,” says an energy sector consultant in Kochi, requesting anonymity. “Consumers end up paying for every deferred cost, regardless of efficiency or delays in execution.”
Past rate hike shocks
Over two consecutive years, Kerala households have faced multiple tariff shocks. In December 2024, KSERC approved an average hike of 16 paise per unit, followed by another 12 paise for 2025–26 – even as KSEB sought larger increments which were partially rejected.
These hikes coincided with rising fuel surcharges – KSEBL initially proposed 19 paise per unit, though this was later reduced to 7 paise from April 2025, ostensibly to cushion low-consumption users.
In mid-2025, yet another increase – 5 to 20 paise per unit, along with higher fixed charges – was quietly implemented, targeting a revenue shortfall of approximately Rs 6,400 crore in that fiscal year.
Truing‑up and future rate hikes
Regulatory assets typically get factored into KSEB’s next Multi-Year Tariff (MYT) petition. If KSERC rejects part of the request, the unmet amount rolls over, worsening the “regulatory asset pool” and signaling future hikes.
An electricity analyst in Thiruvananthapuram (who spoke on condition of anonymity) explains: “Consumers face a double whammy: increasing electricity bills from above‑average tariff hikes, plus hidden recovery of earlier mis‑costed expenses through ‘truing up’. These deferred liabilities often escape scrutiny until they materialise in future bills.”
With KSEB raising these regulatory assets and proposing further surcharges – especially in the summer period or peak hours – the story underscores how consumers are being steadily burdened while enjoying no meaningful control or transparency over cost overruns.
Kerala electricity consumers should stay alert: every deferred cost could mean a future bill spike – even in years when visible spending appears restrained. Consumer advocates argue the board should undertake genuine operational reforms instead of relying on bill hikes.
As one public commenter on social media noted:“People demand that KSEB cut down operational expenses, rationalise staff strength, and recover arrears of Rs3,000 odd crore before proposing new hikes.”
