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UPPCL revenue recovery takes a hit despite sale of 24% more energy
Only Ghaziabad-III and Noida zones have a through rate of ₹6 or above per unit. UPPCL’s average expenditure on providing power to users is around ₹6 per unit.
Lucknow: Amid its ongoing financial struggles, Uttar Pradesh Power Corporation Limited (UPPCL) has flagged 37 of its 40 zones where the revenue recovery rate per unit decreased since the last year despite it selling 24% more energy to users during the same period.
This is despite the fact that energy minister AK Sharma and top UPPCL bosses have been emphasising the need for recovering revenue that matches the cost at which power is supplied.
The UPPCL’s average power supply cost is around ₹6 per unit but against it the corporation gets much lower through rate resulting in heavy losses. A through rate is the rate at which a utility realises revenue for each unit consumed by power users.
The low through rate in UP is attributed to several factors including rampant theft of electricity, high technical and commercial losses and inefficient billing, among others.
A recent report prepared by UPPCL shows that while the corporation has sold more electricity to consumers this year, its per unit through rate decreased compared to what it was in the last financial year.
It is revealed that the per unit revenue realisation rate decreased in all but three zones up to June 2024 over the corresponding period of 2023.
Ayodhya, Gorakhpur-II and Lucknow Central are probably the only zones in the state to have shown improvement in the through rate over the previous year.
In the Meerut discom, comprising 11 zones, the average through rate declined by 48 paise per unit while the Agra discom, with nine zones showed, a decline by 28 paise per unit was observed.
In the Lucknow discom, which consists of 10 zones, the slide was 30 paise per unit and 18 paise per unit in Varansi discom. Kanpur’s KESCO showed a decline of 84 paise per unit, the highest of all discoms.
“Overall, UPPCL’s per unit realisation rate decreased by 9.17% or by 34 paise up to June this year vis-a-vis the same period of 2023,” an energy department official said.
Though UPPCL’s average expenditure on providing power to consumers is around ₹6 per unit, there are only two zones in the state where the through rate per unit this year is ₹6 or above: Ghaziabad-III and Noida.
Lucknow Central, Gomti Nagar, KESCO and Meerut are zones with through rates of above ₹5 per unit. The cumulative deficit of UPPCL now stands at over ₹1 lakh crore. Worried, UPPCL chairman Ashish Kumar Goyel in a recent meeting urged officials to ensure that the assessment of revenue as well as its recovery was in proportion to the increase in the sale of energy to consumers in summers.
“Make a strategy to increase revenue realisation by increasing the through rate in the divisions where the rate is below ₹3 per unit,” he told officials.
In the annual revenue requirement (ARR) for FY 2024-25, UPPCL has projected its revenue requirement to be Rs. 1,01,785 crore and the revenue (at existing tariffs) as ₹75,561.62 crore.
Despite the state government’s subsidy of Rs. 15,019.99 crore, the corporation expects a revenue gap of Rs. 11,203.00 crore in 2024-25. UP Electricity Regulatory Commission (UPERC) that has examined UPPCL’s ARR is expected to announce the new tariff by August end.
“Much of the losses of the UPPCL are because of its own inefficiency and UPERC should not increase the tariff to assist UPPCL to narrow down its revenue-expenditure gap,” UP Rajya Vidyut Upbhokta Parishad chairman Avdhesh Kumar Verma said.
