For the fourth consecutive year, the Uttar Pradesh Electricity Regulatory Commission (UPERC) has not permitted Uttar Pradesh Power Corporation and its five distribution companies (discoms) to increase the electricity rates for any category of its 33.3 million consumers. The rates were last hiked in 2018-19.
The maximum slab for domestic consumers in urban areas who consume more than 500 units per month has also been reduced from Rs 7 per unit to Rs 6.50 per unit, while in rural areas it will be Rs 5.50 per unit against Rs6/unit.
Earlier, domestic consumers in the state were charged anything between Rs 5 and Rs 7 per unit depending on their power consumption. This comes as a great relief for domestic users as of the total 33.3 million consumers in the state, 29.5 million are domestic consumers.
Further, as part of tariff rationalisation, the commission has merged the higher tariff slabs with lower ones and also merged some categories to reduce tariff slabs from 80 to 59. As a result, the highest tariff slab of most of the consumer categories will now cease to exist.
Talking to FE, RP Singh, chairman of UPERC said that higher slabs have been done away with which will especially benefit the economy. “At present, the cost recovery is lesser from fixed cost and more from energy consumption. The new tariff regime incentivises higher energy consumption as higher energy consumption means lower cost of supply. This will give a huge impetus to economic growth in the state,” he said.
“This tariff rationalisation will lead to economic growth of the state besides reducing the cross-subsidy burden of commercial and industrial consumers,” the statement issued by the commission stated.
The regulator has also given relief to consumers of Greater Noida area who get the supply from the private discom Noida Power Company Limited (NPCL). The energy charges of NPCL consumers have been reduced by 10%.
“By following the normative AT&C loss of 10.67% against 17.05% claimed by UPPCL, the commission has ensured that the billing, collection and other performance inefficiencies of the discoms are not rewarded and good paying consumers are not punished by paying extra,” the statement stated, adding that the commission has also not allowed any expenditure towards smart meters as claimed by the licensees as the roll our plan approved by the commission clearly stated that this was to be funded through efficiency gains by the licensee in terms of reduction of commercial losses.
The commission has also approved the Green Energy Tariff at the rate of Rs 0.54 per unit in the State for all consumer categories except domestic and agriculture. The Green Energy Tariff will be voluntary i.e. the consumer will have the option to opt for it. Any consumer opting for green energy tariff has to be supplied with renewable energy as per the discoms’ RPO (renewable purchase obligation).
“The Commission has computed that there is a shortfall in subsidy of Rs1,170.75 crore for FY 2020-21 on consumers to whom subsidy is paid at the specified rates by the state government. The commission has directed the licensees to approach the state government for funding of this additional subsidy,” the order stated.
It may be mentioned that the commission had approved UPPCL and its discoms consolidated annual revenue requirement (ARR) for FY 2022-23 for the purchase of 121.47 billion units at Rs78,075.80 crore. Further, the commission has approved an increase of 7.40% in energy sales against 3.82% proposed by UPPCL for FY 2022-23. This is on account of more than 20%increase in energy sales for the period April-June 2022 with respect to the corresponding period of last year. The commission also approved AT&C losses of only 10.67% as per approved in the business plan against UPPCL’s claim for 17.05% AT&C losses.
Stating that the primary objective of the commission is to protect the interests of the consumers and at the same time ensure recovery of reasonable and justified cost of the utilities, the commission said that the new tariff would come in force seven days after it is published. In effect, the tariff is likely to be become applicable from the first week of August.