KSEB in a fix over new pole rental rules

The Kerala State Electricity Board (KSEB) is in a fix over the implementation of the Centre’s Telecommunication (Right of Way) Rules, 2024, which, it fears, would slice away a large chunk of its non-tariff revenues.

What worries the State power utility is a provision in the rules that would prevent it from levying any fees for the use of its electric poles for drawing telecommunication lines. According to the KSEB, the schedule to the rules prescribes a lower rate of ₹100 per year for telecommunication lines, but KSEB says this is below its approved rates.

Implementation of the provisions of the Telecommunication (Right of Way) Rules 2024 would lead to a “probable financial loss” of ₹39.65 crore per year on pole rentals, the KSEB has concluded. Total revenue from pole rentals in 2023-24 was pegged at ₹60.58 crore. The anticipated revenue based on the rates in the Telecommunication (Right of Way) Rules at the rate of ₹100 per pole annually is ₹20.93 Crore, it said.

Section 11 (3) of the Rules prescribes that there shall be no fee for applying for usage of poles for drawing telecommunication lines and for installation of small cells. “No fee, charge, rent, annuity, or any other financial levy, bank guarantee or other financial contribution or compensation in any form, shall be levied on an application under sub-rule (1) or sub-rule (2) as specified in Part-1 of the Schedule. Schedule 3 of the Rules dealing with the ‘Usage of street furniture’ prescribes an annual fee of ₹100 for telecommunication lines, and ₹300 and ₹150 per year for installation of small cells in urban and rural areas respectively.

However, the KSEB management points to a fundamental contradiction between the provisions of the Telecommunication (Right of Way) Rules, 2024, and the Electricity Act, 2003, which is also a Central law. The KSEB notes that the Act forbids the subsidising or encumbering of transmission and distribution assets which include electric poles and such structures to support other activities. Also, the Act has an overriding effect.

“This legal position forbids the applicability of the Right of Way Rules in the case of the aforesaid proposed rates for using electricity poles and such other structures for telecommunication,” the KSEB noted in an August 21 order. The KSEB has also received legal advice to this effect. The power utility has now decided to refer the matter to the State government, seeking either an amendment to the rules, or compensation for it to make up for the loss in non-tariff revenue.