Just months before the crucial 2019 Lok Sabha elections, the Uttar Pradesh power consumers have received a poll bonanza of sorts with the power watchdog announcing to keep the power tariffs unchanged for 2018-19.
In its tariff order, the UP Electricity Regulatory Commission (UPERC) has decided to hold the existing power tariffs for different category of consumers.
During the last power tariff order announced in November 2017, the UPERC had only spared the industrial sector from a hike in 2017-18, while announcing an average tariff increase of 12.72% across the board. The average power tariff hike then was the steepest during the preceding three years with average hike in 2015-16 and 2016-17 standing at 5.47% and 3.18% respectively.
The exemption of industry from power tariff increase had put the Yogi Adityanath government on a favourable footing in run up to the mega UP Investors Summit on 21-22 February 2018, which was inaugurated by Prime Minister Narendra Modi. The state government had garnered investment proposals worth almost Rs 4.68 trillion during the Summit.
Meanwhile, the UPERC has decided to retain the existing policy of giving rebate to consumers who shift from unmetered to the metered connection. If a rural consumer shift from unmetered to metered category, (s)he shall be entitled to 10% rebate applicable from date of installation of meter till end of 2018-19 financial year.
To promote renewable energy, the Commission has retained the rebate to consumers for installing solar water heaters. To promote prepaid metres, the UPERC has retained the discount of 1.25% on Rate of Charge for pre-paid consumers.
In its previous hike effected in November 2017, UPERC had approved the maximum power tariff hike of 63% and 67% for unmetered rural domestic and unmetered rural commercial consumers to encourage their migration to metered segment, which attracted comparatively lower tariff hike of 57% and 43% respectively.
Since the Adityanath government had signed the ‘Power for All’ document with the Centre that mandates power connection to all households, it is estimated the total number of power consumers in UP would burgeon to almost 40 million by 2019-20. The new consumers are expected to comprise 20 million rural and 1.5 million urban consumers. UP power sector has been beset with lower realisation, higher line losses and subsidised power to rural and other segments of consumers.
The UPERC approves power tariffs based on the aggregate revenue requirement (ARR) filed by the power utilities, which includes details about estimated income, expenditure, power demand, supply etc. UP power distribution companies (discoms) had claimed ARR of about Rs 75,485 crore for 2018-19, of which the Commission gave its nod for Rs 70,203 crore. UP Power Consumers Forum president Avadhesh Kumar Verma noted it was a victory of consumer rights that the UPERC decided to hold tariff hike this year.