With the assembly elections over and the new government in office, the process for hiking power tariff for all categories of consumers except farmers has begun.
Ahead of the assembly elections, the Bharatiya Janata Party had promised to give free electricity to the farmers from the current financial year 2022-23.
UP Electricity Regulatory Commission has asked the UP Power Corporation Limited (UPPCL) and its five wholly-owned subsidiaries to file a proposal within 10 days for the slab-wise revision of tariff for the consumers without subsidy. The power regulator has for the first time asked the UPPCL to file the tariff revision without subsidy.
The power regulator is likely to order a hefty hike in power tariff as it has asked the UPPCL to file the tariff proposal to cover the cash deficit of Rs 6,700 crore.
It has asked the UPPCL to file the annual revenue requirement (ARR) for 2022-23, which includes the proposal for the slab-wise tariff revision. The power regulator has issued the direction in response to the shortcomings in the ARR filed by the UPPCL on March 8.
As soon as the revised ARR is filed by the UPPCL, the power regulator will commence hearing on the proposal for the tariff revision. It has expressed concern over the delay in installation of electricity meters at the residences of the employees of the UPPCL and other public sector undertaking utilities in the power sector.
The Centre, in December last year, had asked the Uttar Pradesh government to ensure that discoms (distribution companies) begin the process of power tariff revision for the financial year (FY) 2022-23 immediately. Such a step is necessary if the discoms do not want to miss out on being a part of the already launched reform-based, result-linked revamped distribution sector scheme (RDSS) that seeks to help them improve their financial resilience and provide better quality service to their customers.
According to the Rural Electrification Corporation (REC) Ltd, the agency for the RDSS programme, the discoms have to mandatorily comply with a set of pre-qualification criteria to become eligible each year for evaluation, the outcome of which will decide whether the discom is eligible for sanction of Part II DPR (modernisation and system augmentation) and disbursement of funds every year starting from FY 2023 onwards.
The first evaluation will be done in FY 2022-23 for the quarters pertaining to FY 2021-22 after finalisation of audited accounts for FY 2021-22. The same will continue every year for three years till the conclusion of the scheme.
The REC has emphasised that discoms should have the tariff order effective for the 2022-23 approved by the appropriate electricity regulatory commission for implementation from April 1, 2022. And this tariff petition, it added, should have been filed by November 30, 2021 in order to allow a period of 120 days for tariff petition scrutiny and tariff determination, as per guidelines.
Accordingly, the REC said, discoms may file true-up petitions without delay, for which finalisation of audited accounts for FY 2020-21 is also essential. “Both tariff petition and true-up activities may be completed immediately, if not already done,” it said.
The UP government in January had announced a 50 per cent reduction in power tariff for farmers. The move benefitted over 13 lakh farmers in rural and semi-urban areas. The total revenue which the UPPCL gets from this category amounts to around Rs 1,900 crore.