In less than six months after the hefty hike of 12 percent in power tariff in December last year , the power utility UP Power Corporation limited (UPPCl) has filed a review petition with the power regulator seeking tariff revision. The regulator UP State Electricity Regulatory commission (UPSERC) will hear the matter on May 2.
The revised tariff was announced on November 30 last year, a day after the results of the urban local body elections were announced and came into force on December 15 and is valid till March 31, 2019. The November 2017 tariff order had spared the small medium and micro enterprises and heavy industries from the hike. The hike would fetch additional revenue of Rs 6,819 crore to the UPPCl in 2018-19. The UPPCl to cover its huge cash losses had sought an average hike of 22 percent in tariff. Despite the hefty hike in power tariff there will a cash gap of Rs 2000 crore in the accounts of UPPCl.
UPSERC has admitted the tariff revision petition despite the fact that in its November 2017 tariff order it had for the first time linked the power tariff with the aggregate technical and commercial losses and 100 percent revenue recovery for the current fiscal 2017-17, thus raising the bar of efficiency and standards of accountability on UPPCl.
The November 2017 tariff order had effectively restrained the UPPCl from seeking further hike in power tariff for 2019-20 on the ground of high line losses and high outstanding revenue. The line losses in 2016-17 were 30 percent. The current tariff has been computed on the basis of 19 percent line loss. The power regulator has approved multiyear aggregate revenue requirement. The power utility is now bound to reduce the line losses to 15 percent by 2018-19 and 12.96 percent in 2019-20 and ensure hundred percent revenue realisations.
“The power regulator is working against its own order. It had infect barred the UPPCl from seeking hike in tariff for 2019-20 if it failed to bring down the line losses to below 15 percent failed to achieve 100 percent revenue recovery. Instead of enforcing its order, it has admitted the petition of the power utility’’, said Avadesh Verma, president of UP power consumer forum. The forum has opposed the petition of the UPPCl and the regulator has permitted the Forum to place its argument on May 2 hearing.
UPPCl sources said the review petition for the hike in power tariff has been filed due to the losses incurred by the power utility due to the abolition of the regulatory surcharge by the UPSERC, escalation in fuel and power purchase cost, disputed arrears running into several thousand crores and outstand subsidy amount so for not released by the state government.
UPPCl sources however said the work to rule agitation by the power employees and suspension of the revenue recovery in the last month of the financial year 2017-18 seriously dented the revenue position of the power utility. The power employees had suspended the revenue recovery in March against the move of the government to privatise the power distribution in seven districts. The government later roll backed its decision. Sources said the revenue recovery was down by 40 percent against the target. The shortfall in revenue recovery aggravated the finances of the UPPCl already reeling the cash gap of Rs 2,000 crore during the last fiscal 2017-18.
Avadesh Verma, the president of the power consumer forum said it will vehemently oppose the petition of the UPPCl. ``The UPPCl petition for hike in power tariff is crucial test for the Yogi Adityanath government to decide whether it favours the power consumers or the inefficiency of the power utility.
