The Karnataka Electricity Regulatory Commission (KERC) has approved a substantial reduction in electricity tariffs. This decision marks a significant shift in the state’s energy landscape, offering much-needed relief to the commercial, industrial, educational, and healthcare sectors, as well as domestic consumers. The changes, outlined in the newly approved Retail Supply Tariff for the fiscal years 2025-26, 2026-27, and 2027-28, come as part of KERC’s strategy to streamline energy pricing and reduce cross-subsidisation between different categories.
With the introduction of these revised tariffs, KERC aims to make electricity more affordable for businesses and institutions crucial to Karnataka’s economic and social infrastructure. The tariff restructuring is expected to lead to lower energy bills for a wide range of consumers, particularly those in high-demand sectors. One of the most significant measures in the new plan is the reduction in energy charges for High-Tension (HT) and Low-Tension (LT) consumers in commercial and industrial sectors. These sectors, which have long faced high power bills, are set to benefit from substantial cost cuts. For instance, HT commercial consumers will see a reduction of 205 paise per unit starting in the 2025-26 fiscal year. Similarly, energy charges for HT industrial consumers will be slashed by 30 paise per unit, offering some relief to manufacturers and other heavy industries that rely on substantial electricity consumption.
The tariff reductions are also expected to have a profound impact on Karnataka’s educational institutions and hospitals, both of which are integral to the state’s social fabric. For these sectors, energy charges will be reduced by 90 paise per unit, providing a much-needed reprieve in an era of rising operational costs. In a move to incentivise sustainability, KERC has also introduced measures to support renewable energy adoption. For LT domestic solar consumers who have rooftop solar installations (up to 10 kW), the commission will provide a rebate of Rs 25 per kW on fixed charges. This move is expected to encourage more households to adopt solar energy, further advancing the state’s renewable energy goals and reducing reliance on conventional power sources. Domestic consumers will not be left out of the tariff revisions. The fixed charges for LT domestic lighting will see a reduction of 10 paise per unit in 2025-26, with further cuts in subsequent years. While these reductions are modest, they offer relief to households across the state, particularly in an era when rising utility costs have been a growing concern.
However, despite the significant reductions in energy charges, fixed charges for domestic consumers are set to rise gradually over the next few years. In 2025-26, the fixed charges will be set at Rs 145 per kW, with an incremental increase of Rs 5 per kW in 2026-27 and Rs 10 per kW in 2027-28. While these increases may seem small, they reflect the need for continued investments in the state’s power infrastructure. KERC’s decisions also include the approval of the Annual Revenue Requirement (ARR) for Karnataka Power Transmission Corporation Limited (KPTCL) for the three-year control period. The ARR for FY 2025-26 stands at Rs 7,067.44 crore, increasing to Rs 7,360.25 crore in 2026-27, and Rs 8,075.52 crore in 2027-28. These figures highlight the growing financial needs of Karnataka’s energy infrastructure and the importance of balancing cost reductions with the sustainability of power supply. This tariff adjustment comes at a time when the state is focusing on both affordability and sustainability in its energy policy. The reduction in electricity charges for critical sectors such as healthcare, education, and industry aligns with Karnataka’s broader economic and social objectives, including fostering an environment conducive to business growth and educational excellence. By cutting energy costs for these vital sectors, Karnataka’s government hopes to stimulate economic growth, increase investments, and enhance the quality of life for its citizens. The plan also underscores the state’s commitment to green energy, with increased incentives for solar energy users, which will contribute to the transition towards a more sustainable and eco-friendly power grid.
In summary, KERC’s newly approved tariff plan brings significant changes to Karnataka’s power pricing structure. While the benefits for commercial, industrial, and educational consumers are particularly notable, the adjustments reflect a broader strategy to balance affordability with the need for continued investment in the state’s energy infrastructure. With these changes, Karnataka is poised to provide substantial relief to key sectors while also advancing its sustainability and economic goals.
