Bengaluru: Amid growing debate over the possible privatisation of electricity distribution in Karnataka after Tata Power sought a distribution licence, energy experts and employees’ unions have traded sharp arguments over the performance of state-run Escoms.Experts and consumer groups have flagged shortcomings in the existing system, including the delay in implementing Solar Time-of-Day (ToD) tariffs mandated under the Electricity Amendment Rules, withdrawal of incentives for high-tension (HT) consumers, refusal to introduce prepaid meters despite legal backing, and lack of transparency in security deposit interest calculations. Experts have also criticised Escoms for failing to comply with long-pending Karnataka Electricity Regulatory Commission (KERC) directions on cost-of-supply based tariff determination, arguing that inefficiencies and transmission losses continue to burden consumers through higher tariffs.The Federation of Karnataka Electricity Board Employees’ Unions fears that private operators may focus only on lucrative urban markets while neglecting rural areas and welfare schemes such as Gruha Jyothi and free power for farmers. Employee unions have also warned that privatisation could threaten the livelihood of thousands of permanent, contractual and outsourced workers.Drawbacks pointed out by experts1. Denial of Solar ToD tariff: Despite the Electricity Amendment Rules-2023 mandating implementation of ToD tariff for industrial consumers above 10 kW from April 1, 2024, and for other consumers from April 1, 2025, Escoms are yet to roll out the system. Consumer and industry bodies have been seeking implementation, stating ToD tariffs would help consumers reduce electricity tariff by 10-20% by shifting consumption to daytime solar hours when power availability is higher and cheaper.2. Withdrawal of incentive scheme for HT consumers: KERC in its successive orders had approved a rebate of Re 1 per kWh for units consumed in excess of base consumption between 10am and 6pm, and likewise Rs 2 per unit to high-tension (HT) consumers for additional consumption between 10pm and 6am to encourage off-peak usage. The withdrawal of this incentive has drawn criticism from industries that depended on subsidised night-time power.3. Refusal to install prepaid meters: Consumers seeking exemption from security deposits demanded installation of prepaid electricity meters. However, Escoms declined implementation citing non-availability of meters. This is despite the high court’s ruling in the Vijayaa Steels vs Bescom case, which held that consumers opting for prepaid meters need not furnish security deposits as per provisions of the Electricity Act-2003.4. Lack of clarity on security deposit interest: Under the KERC regulations, Escoms are authorised to collect security deposits from consumers in two forms–meter security deposit and two-month average consumption charges. These deposits carry an obligation on Escoms to pay annual interest to consumers. However, consumers have consistently raised concerns about lack of transparency in the computation of the applicable interest rate and the manner in which the credited amount is adjusted in bills. The practice of raising frequent demands for additional security deposit through monthly bills — without first accounting for the excess deposits already lying with Escoms — has compounded consumer confusion and eroded confidence in the fairness of the process.5. Failure to comply with cost of supply charge: KERC in its 2000 tariff order had indicated the method of arriving at cost of service by functionalising assets into three categories – demand, energy and consumer-related expenses. However, even after 26 years, the Escoms have failed to comply with the direction which is affecting the tariffs determined every year. Why employees’ unions oppose privatisation1. Concerns over handing public infra to private players: Employee unions argue that Escoms have created massive electricity infrastructure over the years using public funds, including transmission lines, substations and distribution networks. Allowing private companies to utilise these assets for profit-oriented operations, they say, would go against public interest and consumer welfare.2. Profit-driven model may neglect rural areas: According to the Federation of Karnataka Electricity Board Employees’ Unions, private companies focus on high-revenue urban pockets rather than service delivery. They warn that privatisation could lead to neglect of rural distribution networks, eventually weakening electricity infrastructure and services in villages.3. Threat to welfare and social justice schemes: The federation contends that govt welfare schemes such as free power for irrigation pump sets, Gruha Jyothi, Bhagya Jyothi and Kutira Jyothi are aimed at supporting poor and marginalised sections. They allege that private players may not be willing to sustain such subsidised social welfare initiatives.4. Fear of higher tariffs under private operators: Escom employees claim that despite rising generation and transmission costs, state-run Escoms have maintained comparatively lower tariffs. They allege that private firms could impose higher charges through mechanisms such as smart meters, thereby increasing the burden on poor and middle-class consumers.5. Concerns over employee livelihood and vacancies: The federation stated that over 35,000 posts remain vacant across electricity supply companies and existing employees are working overtime to maintain uninterrupted services. They argue that allowing private players into the sector at this stage could threaten the livelihood of permanent, contractual and outsourced employees.
