KSERC has approved a revenue surplus for Thrissur Electricity Department for FY2025-26 and FY2026-27 after revising ARR, non-tariff income and expenditure estimates.
The Kerala State Electricity Regulatory Commission (KSERC) has issued its final order on the Mid-Term Performance Review (MTPR) petition filed by the Thrissur Corporation Electricity Department (TCED), approving the revised Aggregate Revenue Requirement (ARR) and Expected Revenue from Charges (ERC) for the remaining years of the current multi-year tariff control period covering FY2025-26 and FY2026-27.
While TCED had projected a revenue deficit of ₹880.07 lakh for FY2025-26 and ₹1,136.54 lakh for FY2026-27, KSERC’s review resulted in a significantly different outcome. The Commission approved a revenue surplus of ₹1,006.87 lakh for FY2025-26 and ₹1,181.01 lakh for FY2026-27 after revising key financial assumptions.
A major factor behind the revised projections was the treatment of non-tariff income. TCED had excluded interest earned on its accumulated revenue surplus, citing lower interest rates and the utilisation of part of the surplus for infrastructure development. However, KSERC rejected this approach, stating that the accumulated surplus remains under regulatory control and cannot be utilised without prior approval. The Commission recalculated the interest income using the State Bank of India’s retail term deposit rate of 6.80%, provisionally approving interest income of ₹1,059.82 lakh for FY2025-26. Consequently, the approved non-tariff income increased to ₹1,336.50 lakh for FY2025-26 and ₹1,351.08 lakh for FY2026-27.
KSERC also revised TCED’s expenditure estimates by restricting operation and maintenance (O&M) expenses, including employee costs, repairs, maintenance and administrative expenditure, to the approved norms. During the public hearing, Kerala State Electricity Board Limited (KSEBL) had objected to the higher expenditure proposed by TCED. The Commission further rejected TCED’s proposal to provide ₹625 lakh annually towards future employee salary revisions, observing that such costs can only be considered once actual payments are made. It also disallowed the claim relating to electricity duty under Section 3(1), stating that the applicable legislation does not permit the cost to be passed on to consumers.
On the operational front, KSERC approved projected energy sales of 1,827.98 lakh units for FY2025-26 and 1,899.97 lakh units for FY2026-27. However, it retained the original distribution loss targets of 6.10% and 6.00% for the respective years, rejecting TCED’s request for higher loss targets on the grounds that distribution losses remain a controllable parameter. Based on these approved norms, the Commission fixed the power purchase cost at ₹14,622.21 lakh for FY2025-26 and ₹15,035.22 lakh for FY2026-27.
The Commission also provisionally approved depreciation of ₹119.57 lakh and a Return on Net Fixed Assets of ₹65.02 lakh for both financial years. It clarified that final approval of these amounts, along with interest on long-term loans from the Power Finance Corporation (PFC), will be taken up after the disposal of TCED’s separate capital investment petition. With these observations, KSERC disposed of the petition.
