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Dilemma over power tariff hike as UPPCL sits on Rs15K cr surplus
In what was seen as the “steepest surge proposal in the history of the state’s power sector”, the UPPCL proposed an unprecedented average hike of nearly 30% in power tariffs across consumer categories for 2025-26
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LUCKNOW Will power consumers in Uttar Pradesh be spared a tariff hike for the sixth consecutive year, or will they face a steep increase as proposed by the Uttar Pradesh Power Corporation Limited (UPPCL)?
After months of data analysis and exercise, the UP Electricity Regulatory Commission (UPERC) finds itself in a dilemma, as UPPCL already has a cumulative revenue surplus of about ₹15,000 crore, calculated by the regulator itself.
“UPPCL has been generating surplus revenue every year. Over the past six to seven years, the cumulative surplus has touched around ₹15,000 crore, indicating that it has been earning more than its expenditure under regulatory norms, even though the corporation may claim otherwise,” according to people aware of the matter.
This surplus comes on top of the over ₹11,000 crore excess revenue that UPPCL collected as regulatory surcharge between 2002-03 and 2015-16, even though the Centre and the state had jointly absorbed about ₹70,000 crore of its debt under the UDAY bailout package.
They said permitting a tariff hike for UPPCL despite its surplus revenue is a critical issue the regulator will find hard to ignore, as doing so would mean violating its own rules.
The commission is likely to take a final decision after meeting chief minister Yogi Adityanath and apprising him of all the pros and cons. CM’s directive will be final.
Even if it decides in favour of a hike, the announcement, it is believed, may be delayed to preserve the “feel good” atmosphere the government wants to create in the wake of GST rate cuts.
In what was seen as the “steepest surge proposal in the history of the state’s power sector”, the UPPCL proposed an unprecedented average hike of nearly 30% in electricity tariffs across consumer categories for 2025-26.
If the UPPCL’s proposal is accepted in toto, rates will go up by 40-45% for rural domestic users, 35-40% for urban domestic users while commercial and industrial consumers may see hikes of 20-25% and 15-18%, respectively. At the prevailing tariff, the UPPCL has pegged the overall losses at ₹19,644 crore for FY 2025-26.
UP has seen no tariff hike for the past five years, and the question now being asked is whether the trend will continue for a sixth year in a row.
