No tariff hike in UP again as discoms stay in surplus

UP only state that has not raised its retail power tariff for six years in a row, says consumers’ body

For the sixth consecutive year, electricity consumers in Uttar Pradesh will see no increase in power tariff, with the Uttar Pradesh Electricity Regulatory Commission (UPERC) on Saturday retaining all existing rates for FY 2025-26 as distribution companies or discoms in the state have been found sitting on over ₹18,000 crore surplus revenue.

(For representation)

The decision comes as the Commission finalised the true-up for FY 2023-24, APR for FY 2024-25, and the ARR for FY 2025-26 of the state’s five discoms under the newly notified UPERC (Multi-Year Tariff for Distribution) Regulations, 2025.

Also, for Noida Power Company Ltd (NPCL), a private company supplying electricity in the Greater Noida area, the tariff has been kept unchanged. NPCL consumers will continue to get a ₹10% regulatory discount on the bills.

UPPERC approved a consolidated ARR of ₹1,10,993.33 crore for FY 2025-26, lower than the ₹1,12,865.33 crore projected by the discoms. Against this requirement, the total revenue expected from the existing tariff and the state government’s subsidy of ₹17,100 crore comes to ₹1,03,283.29 crore, resulting in a regulatory gap of ₹7,710.04 crore.

HT already published a report “Diwali gift in store, no power tariff hike likely in UP for 6th yr in a row’ in its October 6 edition.

Welcoming the tariff, UP Rajya Vidyut Upbhokta Parisahad chairman Awadhesh Kumar Verma said, “Now, UP is the only state in the country to have not increased the retail power tariff for six years in a row.”

He demanded that the commission consider reducing the existing tariff in light of the fact that UPPLC had over ₹18000 cr surplus revenue from consumers.

The Commission, in its tariff order announced jointly by chairman Arvind Kumar and member Sanjay Singh, however, noted that UPPCL and the discoms will enter FY 2025-26 with a projected accumulated regulatory surplus of ₹18,592.38 crore, and therefore held that there is no justification to increase tariffs this year.

The Commission has also set a five-year trajectory for reducing distribution losses from 13.78 per cent in FY 2024-25 to 10.74 per cent in FY 2029-30. Only Madhyanchal and Paschimanchal discoms achieved their loss-reduction targets for FY 2024-25, while Purvanchal and Dakshinanchal remained the worst performers.

Also, UPERC has allowed all consumers to opt for the Green Energy Tariff and reduced the additional green energy charge from ₹0.36 per unit to ₹0.34 per unit for high-voltage consumers, while fixing it at ₹0.17 per unit for low-voltage consumers.

The state government will continue providing subsidies to lifeline consumers in rural and urban areas, rural scheduled metered consumers and private tubewells at the same levels as last year.

The average cost of supply for FY 2025-26 has been projected at ₹8.18 per unit, while the average billing rate remains ₹7.61 per unit. Time-of-day tariff categories and time blocks remain unchanged, while the cross-subsidy surcharge for open access consumers has been rationalised further. The Commission noted widespread consumer complaints from multi-storey buildings and townships regarding irregularities and lack of transparency in billing under single-point connections, and said it will soon issue a separate consultation paper to address these issues.

The tariff orders will come into effect seven days after their publication in two Hindi and two English daily newspapers, and have been uploaded on the UPERC website.

The commission is believed to have announced the tariff order after an informal nod from chief minister Yogi Aditanath and energy minister AK Sharma.

Why No Hike?

UPERC has approved a consolidated ARR of ₹1,10,993.33 crore for FY 2025-26, lower than the discoms projected requirement. Against this, the total revenue from existing tariffs and government subsidy is expected to be ₹1,03,283.29 crore, leaving a regulatory gap of ₹7,710.04 crore.

However, since UPPCL/DISCOMs are projected to carry a regulatory surplus of ₹18,592.38 crore as on April 1, 2025, the Commission said there is no justification for burdening consumers with a tariff hike.