Uttar Pradesh power utility proposes 25% hike in electricity tariffs

UP Power Corp has pegged 2019-20 revenue-expenditure gap at Rs 18,091 crore

Power utility Uttar Pradesh Power Corporation Limited (UPPCL) has proposed hiking electricity tariffs by more than 25 per cent for domestic consumers, moving after Lok Sabha elections got over, 

Against the prevailing power tariff of Rs 4.90 per unit for the first 150 units of monthly consumption, UPPCL has proposed to increase the slab by more than 26 per cent to Rs 6.20 per unit.

Similarly, the variable slab for power consumption between 151-300 units, 301-500 units and 500 units upwards have been proposed to be increased by 12-20 per cent to Rs 6.50 unit (Rs 5.40 at present), Rs 7 per unit (Rs 6.20) and Rs 7.50 per unit (Rs 6.50) respectively. Additionally, the fixed monthly charge for a domestic connection is also proposed to be upped 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 has already submitted the proposed new power tariff structure for 2019-20 with the UP Electricity Regulatory Commission (UPERC) for vetting and final approval. Now, the state energy watchdog would conduct public hearing and issue a public notice before taking a call on the new tariff order for the current financial year.

Interestingly, the state power utility had kept power tariffs unchanged for 2018-19 in run up to the Lok Sabha elections and to keep the different category of consumers in good humour. Power tariffs had witnessed a hike in November 2017, when UPERC – while sparing the industrial sector from any increase for 2017-18 – had announced average tariff rise 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.

The state energy department has sought to justify the proposed increase in power tariff for the current year over steeper prices of fuel, including coal, and consequently higher cost of power generation.

In its proposal filed with the UPERC, the UPPCL has pegged 2019-20 annual revenue requirement (ARR) at Rs 76,495 crore, while estimating the revenue-expenditure gap at Rs 18,091 crore, thus offering a precursor to its justification of increasing power tariffs in the state for economic viability and sustainability.

 UP Power Consumers Council chairman Avadhesh Kumar Verma has alleged the yawning revenue-expenditure gap and the projected loss by the state power utility was majorly owing to gross inefficiency of the UPPCL management, apart from the procurement of expensive power.

“The Council will not allow such steep hike in power tariffs for domestic consumers. We will soon chalk our next course of action to oppose this unjustified proposal,” he told Business Standard adding his organisation will take to streets to protest if the proposed higher tariffs were approved by the UPERC.