A day after the civic polls concluded in the state, the Uttar Pradesh Electricity Regulatory Commission (UPERC) on Thursday announced the new power tariff for the current fiscal, allowing an average hike of 12.73% across all consumer segments.
A day after the civic polls concluded in the state, the Uttar Pradesh Electricity Regulatory Commission (UPERC) on Thursday announced the new power tariff for the current fiscal, allowing an average hike of 12.73% across all consumer segments. While the industry sector has been spared, rural unmetered consumers would feel the pinch as the electricity has been made costlier for them by almost 63-66.7%. For the rural metered consumers, the hike would translate to 57%, for urban domestic consumers, the hike would be 8.5% and the urban commercial consumers, the hike would be close to 10%. The rates would be applicable from December 10. The unmetered rural consumers would be worst-affected. Consumers who used to pay Rs 180 per month as fixed rental charge will now be charged Rs 300 per month and have been asked to install meters by March 2018. If they fail to do so, they will have to pay Rs 400 per month as fixed rental charges. The hike for metered rural consumers is Rs 3 per unit for the first 100 units and Rs 3.50 per unit between 100-150 units and Rs 4.50 and Rs 5 after that.
There are around 70 lakh unmetered consumes in villages in the state and their tariff, according to the UPPCL, is too low, causing huge losses to it. The decision comes in the backdrop of the Uttar Pradesh Power Corporation’s (UPPCL) attempt to close the gap between the average cost of power supply and the average revenue of the state discoms. UPERC allowed an overall annual tariff hike of 3.18% for FY17 without imposing any increase for the domestic consumers, the tariff order noted. “At existing tariff, the average billing rate for rural domestic consumers is Rs 1.99/unit which accounts for a recovery of only 29.54% of the average cost of supply, thus discoms would have to bear a loss of Rs 9,283 crore for FY18 against which the government subsidy of only Rs 3,760 crore is available,” the discoms pointed in the tariff-hike petition.
In the recent past, the supply to rural area has been increased from 8-10 hours to 18 hours, which is an increase of almost 80%. Total projected sales to rural consumers for FY18 is 18,636 million units, including the increase in supply hours, constituting 20% of the total sales, the discoms added. UPERC chairman SK Agarwal said the electricity tariff for the unmetered rural domestic consumers has been raised sunstantially in order to encourage them to shift to metered connections. Admitting that the hike for rural consumers was hefty, he said it was because the rates in the past have been very low and keeping in mind the state and Centre’s Power for All pact, it was necessary to hike the tariff as it was not possible for the discoms to continue piling up losses.
Justifying the highest increase in tariff since 2000, UPPCL had said in its annual revenue requirement that the huge gap between the cost of supply and average revenue realisation has to be closed and that can only be done by increasing the tariff of the categories where the tariff is presently low. Principal secretary power, and chairman of UPPCL, Alok Kumar said, “So far, we had tried to close the gap by cross-subsidisation. But there is hardly any headroom left for a further hike in electricity rates of industrial consumers,” he said. The projected average cost of supply for FY18, borne by discoms, has increased to Rs 6.97 per unit from Rs 6.35/unit. The average cost, approved by the regulator, at which discoms would buy power in FY18, FY19 and FY20 has been set at Rs 3.87, Rs 4.01 and Rs 4.17/unit, respectively. The discoms’ net revenue gap approved for FY18 after the tariff increase is Rs 3,552 crore.