Power tariff for all categories of consumers in Uttar Pradesh is likely to go up by 8-10 per cent in the current fiscal 2023-24 with the implementation of the centrally-sponsored Revamped Distribution Sector Reform Scheme (RDSS).

Under the RDSS, part of the burden of the aggregate technical and commercial incurred by the power distribution companies will be passed on to the consumers while the rest will be borne by the company.

Though the RDSS was approved by the Union cabinet in June 2021, the component of passing the burden of line losses to power consumers was recently added and the Union Energy Ministry has sought comments from the state governments till May 11.

The UP government, in its budget of 2022-23, announced the ambitious RDSS, a reform-based and result-linked scheme with an outlay of Rs 31,000 crore in association with the Central government.

A provision of Rs 5,530 crore was made in the budget. The scheme will be completed within the next three years. The scheme aims to improve quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector.

Avadhesh Verma, a member of the state advisory committee on power, said the Union Energy Minister is contemplating amendments in   Indian Electricity Rules 2003 for passing on the burden of line losses to power consumers.  

He said with the amendments in rules, the trajectory of line losses would be determined for each power distribution company across the country and directions would be issued to the state power regulatory to include the cost of line losses in power tariff.

He said that this direction would be mandatory for the power regulators to comply with. He added that as per the proposed amendments in Indian Electricity Rules 2003, almost half the burden due to line losses would have to be borne by power consumers and rest by discoms.

The Union government launched the RDSS with an outlay of Rs 3,03,758 crore and an estimated budgetary support of Rs 97,631 crore for the duration of five years (from FY 2021-22 to FY 2025-26). The scheme aims to reduce the aggregate technical & commercial (AT&C) losses to pan-India levels of 12-15% and average cost of supply (ACS)-average revenue realised (ARR) gap to zero by 2024-25.

The scheme has two major components: Part ‘A’ – Financial support for prepaid smart metering and system metering and upgradation of the distribution infrastructure. Part ‘B’ – Training & capacity building and other enabling and supporting activities.

Financial assistance to discoms is provided for upgradation of the distribution infrastructure and for prepaid smart consumer metering & system metering based on meeting pre-qualifying criteria and achieving basic minimum benchmark in reforms.