In order to meet the highly volatile fuel prices, the Uttar Pradesh Power Corporation has proposed a fuel surcharge to support its current tariff structure.
In a writ filed to the Uttar Pradesh Electricity Regulatory Commission (UPERC), the UPPCL has sought a fuel cost adjustment (FCA) mechanism which will shift the burden of high fuel cost on the consumers.
The UPPCL has mooted this idea of a FCA mechanism after a 20% hike in power tariff in the state in order to meet the ?1320 crore power purchase arrears? that were not approved by the regulator while fixing the new tariff order from April 1 this year. Hence, the corporation has sought the regulator?s approval for introducing the fuel cost adjustment (FCA) mechanism, which will take care of the highly volatile fuel prices.
However, the move has already met with stiff opposition from consumer activists who are opposing the hike. Power consumers? activist Awdhesh Kumar has already filed a PIL in the UPERC, stating the move will prove to be an additional burden on the consumer who is already reeling from the high tariff structure imposed in April.
According to sources in the energy department, the additional surcharge is being proposed to take care of the variation in fuel prices and should be applicable in electricity bills from the 2010-11 fiscal. ?The regulator will fix the formula as to how we will adjust the fuel variation cost on the consumers on a quarterly basis,? said an official of the energy department.
Defending the Uttar Pradesh Power Corporation?s move, the official said there is a periodic escalation in the prices of fuel such as coal, gas and furnace oil. Once the regulator gives its nod to the FCA regime, the UPPCL is expecting to save around Rs 800-1000 crore every year.