The Kerala State Electricity Regulatory Commission (KSERC) will hold a public hearing on Tuesday on the proposal to remove the 10 paise-per-unit cap on the fuel surcharge that can be imposed on electricity bills.

The hearing will be held online at 11 a.m., the commission said.

Through an amendment to its terms and conditions for determination of tariff regulations, the commission is seeking to remove the ‘ceiling limit’ which it had introduced in 2023. Fuel surcharges are imposed by the Kerala State Electricity Board (KSEB) on consumer bills primarily to recover the additional spending on power purchases.

The ceiling limit of 10 paise per unit was originally introduced by the Commission to safeguard the interests of electricity consumers.

The Commission has proposed the amendment following a policy direction from the Kerala government on November 21 seeking compliance with the conditions for prescribed for ‘fuel and power purchase cost adjustment (FFPCA)’ in the Union Power Ministry’s Electricity (Amendment) Rules, 2022. Specifically, the policy direction issued under Section 108 of the Electricity Act sought the removal of the ceiling limit of 10 paise per unit per month fixed by the Commission. Section 108 requires the Commission to be guided by written policy directions from the State government in matters of public interest.

The State government’s policy direction came after the Union government revised the guidelines for States availing additional borrowing of 0.5% of their Gross State Domestic Product (GSDP).

In its draft amendment regulations, the commission took the view that the continuation of the ceiling limit is no longer necessary. It observed that “the fuel surcharge rates are aligned with the actual variations in fuel and power purchase costs, and that the conditions which warranted the imposition of a ceiling have materially improved.”