Bengaluru: Electricity consumers in Bengaluru are set to face a moderate increase in power bills after the Karnataka Electricity Regulatory Commission approved a revenue deficit recovery plan for Bangalore Electricity Supply Company as part of its Annual Performance Review order.

The regulator, in its detailed assessment for FY 2024–25, cleared a net Aggregate Revenue Requirement (ARR) of Rs 34,087.94 crore. It has permitted BESCOM to recover its revenue gap through a structured mechanism beginning FY 2026–27, aiming to balance financial sustainability with consumer impact.

Deficit recovery through monthly “true-up charges”

BESCOM reported a revenue shortfall of over Rs 2,000 crore for the financial year. To address this deficit, KERC has allowed the utility to recover the amount through 12 monthly instalments under “FY25 True-up Charges”.

Instead of imposing a one-time steep hike, the approach ensures that consumers will see a gradual increase in their monthly electricity bills. These additional charges will be spread out, making the financial burden less abrupt for households and businesses.

Officials stated that this staggered recovery model is intended to reduce the immediate impact on consumers while enabling BESCOM to maintain operational stability.

Tariff hike adds to consumer burden

The recovery plan comes alongside a previously approved tariff hike of 56 paise per unit for BESCOM consumers. When combined with the monthly true-up charges, electricity bills in Bengaluru are expected to rise moderately over the coming months.

While the increase may not be sharply noticeable in a single billing cycle, the cumulative effect over time is likely to result in higher overall expenditure on electricity for consumers.

Capital expenditure and regulatory scrutiny

BESCOM also reported capital expenditure of Rs 3,164.79 crore during the review period, exceeding earlier approved estimates. The regulatory commission conducted prudence checks on this spending and allowed most of the expenditure, while making minor disallowances.

KERC has directed the utility to adopt stricter project evaluation and financial discipline in future infrastructure investments. The commission emphasised the need for efficient utilisation of funds to avoid unnecessary financial strain on consumers.

Performance-linked tariff approach across Karnataka

Interestingly, while BESCOM consumers in Bengaluru will see an increase in tariffs, other electricity supply companies in Karnataka that reported profits have been granted tariff reductions.

This reflects a performance-linked regulatory approach, where utilities with better financial management and operational efficiency are rewarded with lower tariffs, benefiting their consumers.

The move is seen as an effort to incentivise efficiency among power distribution companies across the state.

Balancing financial health and consumer impact

Energy experts note that while tariff hikes are often unpopular, they are sometimes necessary to ensure the financial viability of power utilities. Without adequate revenue, utilities may struggle to maintain infrastructure, ensure reliable supply, and invest in future upgrades.

However, the decision to spread the recovery over a year through true-up charges is being viewed as a balanced approach that mitigates immediate consumer hardship.

Conclusion

The latest order by KERC marks a calibrated step towards addressing BESCOM’s financial deficit while attempting to minimise the impact on consumers. As the phased recovery begins in FY 2026–27, Bengaluru residents can expect a gradual increase in electricity bills, highlighting the ongoing challenge of balancing affordability with sustainable power sector operations.