The power consumers of UP will face yet another steep hike in the power tariff during the current fiscal 2017-18. Four power distribution companies, all subsidiaries of the UP power corporation limited filed the annual revenue requirement returns (ARR) with the power regulator for the current fiscal 2017-18 here on Wednesday. The fifth power discom Kanpur electricity supply company is also expected to file the ARR soon.
Officially none of the four discom have sought hike in power tariff. The huge cash loss and 16 percent return on equity (ROE) sought by the four discoms has left the UP state electricity regulatory commission but to order steep hike in power tariff as high as 25 percent. The power tariff was last revised by 5.47 percent for all categories of power consumers in June 2015.
The four discom have shown ARR of Rs 68,674 crore during 2017-18. The net cash loss without the state government subsidy is Rs 20,618 crore. If the annual subsidy of Rs 5,500 crore from the state government is adjusted then the net cash gap is 15,118 crore.
Besides the cash loss, the four discoms also want the tariff to be hiked to bridge the cash loss due to 19 percent transmission and distribution losses. Moreover for the first time since inception in year 2000 the discoms have sought 16 percent return on investment. If the ARR by the five discoms is allowed by the power regulator then it will have to order at least 25 percent hike in power tariff for the current fiscal 2017-18.
The four discoms have sought the regulators approval of Rs 52,919 crore for the power purchase from different sources including independent power producers and power exchange. If the transmission cost is added in the power to be purchased then the actual cost of power purchase will be Rs 54,787 crore. For the consumers this means that the cost of power at the consumer end will be Rs 7.32 per unit.
Avadesh Verma, chairman of the UP power consumer’s forum said here that the four discoms have filed the ARR without auditing their accounts from the CAG. He said the discoms have sought ROE of 16 percent for the time to cover their losses. He said the ROE could be the move of the state government to set the stage for the ultimate privatization of the power distribution companies in coming years.
The hike in power tariff will be a tough challenge before the Yogi Adityanath government. Chief Minister has already ordered 24 hour power supply at district headquarters, 18-hour power supply in villages, 20-hour at tehsil level and in Bundelkhand region. UP government in April had also signed an MOU with the Center ``Power for all’’ for round the clock power supply to all categories of power consumers by October 2018.
In UP as many as 1.86 crore families lack access to electricity. In the coming 100 days, the UP government plans to give five lakh new electricity connections. The Below Poverty line (BPl) households will be given free electricity connections. The government has also plans to bring a stringent legislation for curbing the power theft. UP requires about 16,000 MW to supply power and is also purchasing electricity to meet the demandb