KERC Notifies 2026 Roadmap To Gradually Reduce Electricity Cross-Subsidy In Karnataka

The Karnataka Electricity Regulatory Commission (KERC) has officially notified the “Roadmap for Reducing Cross-Subsidy and Cross-Subsidy Surcharge Regulations, 2026,” marking an important step toward aligning electricity tariffs with the actual cost of supply in the state. The decision follows directions from the High Court of Karnataka and is also in line with the provisions of the National Tariff Policy, which encourages gradual reduction of cross-subsidies in power tariffs.

The main aim of the new regulations is to bring electricity tariffs within a ±20 percent band of the Average Cost of Supply (ACoS). Cross-subsidy in the power sector occurs when some categories of consumers, usually industrial or commercial users, pay higher tariffs so that other categories, such as domestic or agricultural users, can receive electricity at lower rates. According to the commission, KERC has already managed to bring most consumer categories within the 20 percent limit during the past 24 years. However, a few categories still fall significantly outside this band and require a structured plan to gradually correct the imbalance.

The roadmap specifically highlights two consumer categories where the subsidy level remains much higher than the prescribed range. One of these categories is electric vehicle charging stations under the LT-6c tariff category. At present, this segment receives a subsidy level of about –48.83 percent compared to the average cost of supply. Under the new regulations, this gap will be reduced gradually over a six-year period beginning from the financial year 2028–29. The reduction will take place at an annual rate of about five percent until the subsidy falls within the permitted band.

The second category identified is private lift irrigation under the HT-3 tariff category. This category currently receives a subsidy level of nearly –78.98 percent, which is significantly below the acceptable range. To address this imbalance, the commission has planned a steeper reduction path. Starting from FY 2028–29, the subsidy will be reduced by about 10 percent each year over six years until it moves closer to the required ±20 percent range.

The commission also clarified that as subsidies for these categories are gradually reduced, the tariffs for consumers who currently pay higher rates to support these subsidies may also be adjusted. However, the regulations will not apply to temporary power supply connections, as these typically involve high loads and unpredictable usage patterns.

Before finalizing the regulations, KERC conducted a public consultation process. The draft regulations were released in December 2025, and a public hearing was held on February 3, 2026, where stakeholders submitted both written and oral comments. The commission stated that it retains the authority to amend or modify the regulations in the future if implementation challenges arise.

In the same Gazette notification, the Principal Census Officer of Bengaluru Rural District, A. B. Basavaraju, issued a reminder about responsibilities under the Census Act. The notice warned that individuals who fail to perform census duties or obstruct others from doing so could face a fine of up to ₹1,000 and possible imprisonment of up to three years.