Uttar Pradesh Electricity Regulatory Commission has thrown a spanner in UP Power Corporation Limited’s bid to raise additional revenue by hiking power tariff by 25 percent.
The power regulator has issued a notice to the UPPCL, asking it why the benefit of UDAY scheme should not be passed on to electricity consumers.
After hearing the power consumers’ forum and the power corporation, the UPERC has directed the UPPCL to file its reply within 15 days.
The power regulator has given two options to the UPPCL — either the power consumers be given rebate of 2.5 to 5 percent on making payment of bills within the due date or there should be no hike in the power tariff as demanded by the UPPCL in its Annual Revenue Requirement (ARR) statement filed to the UPERC seeking a hike of 25 percent in power tariff to bridge the revenue gap for 2019-20.
In 2016-17, the accumulated losses of the UPPCL were Rs 70,738 crore which included debt of Rs 53,211 crore. Under the Ujwal DISCOM Assurance Yojana, the UP government had taken over the liability of Rs 39,908 crore or 75 percent of the debt.
The Ujwal DISCOM Assurance Yojana is a financial turnaround and revival package for electricity distribution companies of India, initiated by the Union government with the intent to find a permanent solution to the financial mess that the power distribution companies are in.
It allows state governments, which own the DISCOMs, to take over 75 percent of their debt as of September 30, 2015, and pay back lenders by selling bonds.
UP Power Consumers Forum chairman Avadesh Verma said the UPPCL had sought 25 percent hike in power tariff by showing a revenue gap of Rs 9,000 crore. He said that instead of a hike, the power tariff should be slashed as the UPPCL got annual subsidy of Rs 9,000 crore from the UP government and also exemption from paying interest and principal on the debt of Rs 39,908 crore.
Demanding a high level investigation into the matter, Verma said that after the implementation of the UDAY scheme, many states in south and east India had passed on the benefit to the power consumers while in UP, far from any benefit, the power consumers were being made to pay from their nose with hike in power tariff almost every year.
The UPPCL has proposed more than 25 per cent hike in power tariff for domestic consumers. Against the prevailing power tariff of Rs 4.90 per unit for the first 150 units of monthly consumption, the UPPCL has proposed to increase the slab by more than 26 per cent to Rs 6.20 per unit.
Similarly, the variable slabs for power consumption between 151-300 units, 301-500 units and 500 units upwards per month have been proposed to be increased by 12-20 per cent to Rs 6.50 per unit from the present Rs 5.40, Rs 7 per unit from Rs 6.20 and Rs 7.50 per unit from the present Rs 6.50, respectively.
Additionally, the fixed monthly charge for a domestic connection is also proposed to be increased by 10 per cent. Besides, the power tariffs for the state commercial sector consumers have also been proposed to be hiked by 10-15 per cent.
The UPPCL had submitted the proposed new power tariff structure for 2019-20 to the UPERC for vetting and final approval.
Power tariffs had witnessed a hike in November 2017, when the UPERC, while sparing the industrial sector from any increase for 2017-18, had announced an average tariff hike of 12.72 per cent across board. The average power tariff hike was then steepest compared to preceding two years with average hike in 2015-16 and 2016-17 figuring at 5.47 per cent and 3.18 per cent, respectively.
In its proposal, the UPPCL has pegged 2019-20 ARR at Rs 76,495 crore, while estimating the revenue-expenditure gap at Rs 18,091 crore, thus offering a justification for increasing power tariffs in the state for economic viability and sustainability.