25 Years of KERC: Pioneering Power Reforms and Renewable Energy Growth in Karnataka

The Karnataka Electricity Regulatory Commission (KERC) recently celebrated 25 years of service to Karnataka’s electricity sector. Over these years, KERC has played a crucial role in transforming the sector, ensuring the reliable delivery of power and promoting renewable energy sources. The state was an early leader in electricity generation, building its first hydroelectric station in Shivanasamudra in 1902. This initiative marked the beginning of Karnataka’s significant contributions to India’s power sector.

KERC was established in 1999 as one of the first regulatory commissions in India. It was formed to oversee the generation, transmission, and distribution of electricity, introducing reforms aimed at improving operational efficiency, reducing costs, and enhancing customer service. The commission’s establishment was part of broader reforms under the Karnataka Electricity Reform Act of 1999, which aimed to encourage private investment and improve service delivery.

The commission has implemented various measures to support renewable energy. Karnataka has become a leader in this field, with renewable sources contributing significantly to the state’s power mix. The share of renewable energy increased from less than 1% in 2000 to over 50% in 2024. This growth is attributed to policy initiatives and incentives such as promotional tariffs, concessional wheeling charges, and standardized agreements for power purchase and banking.

KERC’s efforts in issuing timely tariff orders have been instrumental in maintaining the financial health of power utilities. These orders have ensured that utilities recover their costs while keeping electricity affordable for consumers. The commission also emphasizes transparency, regularly holding public consultations before finalizing regulations and tariffs.

Over the years, KERC has introduced innovative concepts like open access and smart metering. It has also focused on reducing transmission and distribution (T&D) losses. Since its inception, T&D losses have fallen from 36% in 2001 to about 14% in 2024. This reduction has improved the overall efficiency of the electricity sector.

KERC’s functions include issuing licenses for transmission and distribution, setting tariffs, and regulating the purchase and procurement processes of power distribution companies. It also resolves disputes between power companies and consumers, ensuring compliance with service standards. Additionally, the commission promotes renewable energy and cogeneration by facilitating grid connectivity and mandating a share of renewable energy in power consumption.

Looking ahead, KERC plans to continue its efforts in making Karnataka’s power sector more competitive, consumer-friendly, and sustainable. The commission remains committed to adopting new technologies and concepts to improve service delivery and maintain the sector’s financial stability. The commission’s work over the past 25 years reflects its dedication to ensuring a reliable and efficient power supply for the people of Karnataka.