 "UP energy watchdog spares industry from tariff shock")
Uttar Pradesh energy watchdog has spared the industrial sector from power tariff hike for 2017-18 even as it announced on Thursday a 12 per cent increase in the average tariff payable by the sector across board.
The exemption in power tariff not only provides relief to the industrial sector, but it also places CM Yogi Adityanath government on a better footing right ahead of the global investors’ meet that is slated to take place on February 21 and 22 in 2018. The two-day mega event is expected to attract investments into the state.
However, the recent average hike has been the steepest over the past three years. In the preceding financial years- FY16 and FY17- the average increase stood at 5.47 per cent and 3.18 per cent respectively.
The UP Electricity Regulatory Commission (UPERC) has also approved a power tariff hike of 63 per cent and 67 per cent for the unmetered rural domestic and commercial consumers. The move is expected to encourage customers to migrate to the metered segment, offering a lower tariff hike of 57 per cent and 43 per cent respectively.
The ‘Power for All’ pact signed between the Adityanath-led state government and the Centre aims at providing power supply to every household in UP. This seems to be a mammoth of a challenge, given the total number of power consumers in the state is estimated to burgeon from existing 18 million to 40 million by 2019-20.
“The new power consumers would comprise over 20 million rural and 1.5 urban consumers,” said UPERC’s acting chairman, S K Agarwal. He attributed the hike in power tariffs to lower realisation, higher line losses and subsidised power to rural and other consumer segments.
“Against an average power cost of Rs 6.64 per unit for the rural sector, the realisation was hardly Re 1 per unit, which is borne by power distribution companies (discoms) without any financial support by the state government. Given the massive projected increase in the rural consumer-base going forward, it would be impossible for the discoms to cope with such a gap,” he noted.
Meanwhile, urban consumers would bear a power tariff hike of 8.49 per cent (domestic) and 9.89 per cent (commercial). Likewise, the Commission has also increased the fixed charges on power connection to partially remunerate the beleaguered discoms in UP.
Giving relief to the social sector, the energy watchdog has exempted shelter homes, orphanages, old age homes and similar institutions from commercial tariffs- a move that would effectively reduce their power bills.
The new tariffs would be effective after seven days of issuing a public notice on the matter by the UP Power Corporation Limited (UPPCL).
At present, the UPERC approves new power tariffs based on the aggregate revenue requirement (ARR) filed by power utilities that has details on estimated income, expenditure, power demand and supply, among other relevant data.
Last year, domestic power consumers were spared from a power tariff hike. Tariffs remained unchanged for the large and heavy industries as well. However, the small and medium enterprises (SMEs) had witnessed their tariffs rise by almost 4 per cent.
