Uttarakhand 5.2% rise in power rates a relief for clients

The annual rise of 5.21 percent in power tariffs for the year 2013-14 has come as a relief for both domestic and industrial consumers in Uttarakhand despite fears of a steep rise of 10-20 per cent. The Uttarakhand Power Corporation (UPCL), the sole power government-owned distribution company, has sought an increase of 67 per cent in power rates in its annual revenue requirement (ARR) filed to the Uttarakhand Electricity Regulatory Commission (UERC).

For LT industry, the average hike was Rs 0.22 per unit from the existing Rs 4.39 kwh to Rs 4.61.kwh. In the same way, the average billing rate for the HT industry will be Rs 4.58 kwh from Rs 4.35 kwh, an increase of Rs 0.23 per unit. The tariffs were announced by the UERC here last evening.

On the other hand, there was only Rs 0.15 increase in the tariffs of domestic consumers from Rs 2.91 to Rs 3.06 Kwh. The tariffs for non-domestic consumers will be Rs 4.86 kwh from the existing Rs 4.68 kwh, an increase of Rs 0.18 per unit.

"Our tariffs remain the lowest among many states in the country," said Neeraj Sati, secretary of the UERC.

"We welcome the power tariffs announced by UERC," said Vibha Malhotra, Director state office of the Confederation of Indian Industry (CII). Earlier there were market fears that the UERC might impose a hefty hike in view of the central government's move to improve the health of the discoms in the country. "Since the UPCL has not made any substantial capital barrowing from the market, the central government's scheme for discoms had no effect on it," said Sati.

To meet the power purchase cost and other expenses, UPCL had projected a total ARR of Rs 4834.20 crore for current fiscal considering distribution losses of 18.25 percent and thus projected a total revenue gap of Rs 1885.12 crore. For recovery of this revenue loss, the UPCL had requested for a tariff hike of about 50 percent.

Based on scrutiny of data submitted by UPCL, the Commission has determined the ARR for the current fiscal at Rs 3932.60 crore. The ARR takes into account the impact of final truing up for the FY 2010-11 and provisional truing up for the year 2011-12. The UERC further estimated that the revenues at Rs existing tariffs on the projected sale of 9395.12 MU for the year 2013-14 is Rs 3753.36 crore. This leaves a revenue gap of only Rs 179.25 crore. To recover this revenue gap, an annual tariff hike of only 4.78 % was required. However, since the revised tariff will be applicable from May 1, 2013, the hike required to cover the gap in 11 months works out to be 5.21 percent.