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HindustanTimes Sun,26 Oct 2014

ERC in fix over sparing urban domestic consumers

Brajendra K Parashar, Hindustan Times  Lucknow, October 09, 2012
First Published: 16:08 IST(9/10/2012) | Last Updated: 16:09 IST(9/10/2012)

Even as it gears up to announce the revised power tariff by next week, the UP electricity regulatory commission (UPERC) is in two minds over increasing electricity rates for urban domestic consumers.

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While it is certain that industrial consumers are going to get the short end of the stick with rural consumers remaining untouched, the commission is a divided house over urban domestic consumers.

The UP Power Corporation Limited (UPPCL) had, in its annual revenue requirement cum tariff proposal for 2012-13, proposed the maximum hike (around 50%) for industrial consumers. It, however, proposed no hike for the domestic category, which alone accounts for 26% of its total revenue.

The commission is of the view that UPPCL may justify its not proposing any tariff revision for agricultural and rural domestic

consumers since the state government was subsidising these categories. The government has promised Rs. 4,000 crore subsidy of which Rs. 240 crore is for private tubewells owned by farmers and the rest for rural domestic consumers.

“But there is no logic for sparing unsubsidised urban domestic consumers while putting all the burden on the industrial consumers,” said sources.

The dominant view in the commission, however, is that if the commission increases tariff for urban domestic consumers, it may cause unwarranted unrest at a time when people are already beset with spiraling price rise.

“There is, therefore, little possibility of urban domestic consumers facing any hike. The commission may think of a hike while deciding on the next tariff revision in March,” said a source.

Meanwhile, the UPERC is contemplating an average hike of 25-30% on industrial and commercial consumers, far less than the one proposed by the UPPCL. Besides, tariff would go up for government departments, public street lighting, institutions etc, said sources.

However, the hike to be okayed by the commission was unlikely to bridge the gap between UPPCL’s revenue and deficit during the current year, they added, pointing out the commission has given precedence to logical revenue gaps over illogical hikes.

They said the tariff increase in case of industrial consumers would be allowed only the extent that it covers the increased delivery of power at the UPPCL’s end. “The UPPCL’s electricity delivery cost is Rs. 5.92 per unit at present against R4.17 per unit during 2009-10 when the tariff was revised last,” a source said.


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