New power tariff in UP: Unprecedented hike for rural consumers, nominal for urbanites

The UP Electricity Regulatory Commission (UPERC) on Thursday announced retail power tariff for 2017-18, giving a high-voltage shock to rural domestic consumers as well farmers.

The average tariff hike is 12% against the 20% demanded by the UP Power Corporation Ltd (UPPCL).

Urban domestic consumers, who faced steep tariff increases in previous years, have been let off with an 8.9% hike, increasing around 40-50 paise in each slab. Their fixed monthly charges have been increased from Rs 90 per KW to Rs 100 per KW.

The revised tariff will come into effect from the second week of December after UPPCL notifies the new rate schedule. The hike will generate additional revenue of Rs 2,000 crore for UPPCL during the next four months left in the current financial year.

The regulator has made an unprecedented tariff increase for rural domestic consumers — both metered and unmetered and also for private tube wells owned by farmers in villages.

In an apparent bid to encourage unmetered consumers to get metered and pay on the basis of actual usage, the commission has increased the tariff of unmetered rural domestic consumers from the current Rs 180 per KW per month to Rs 300 per KW per month, the hike being more than 66%. Their tariff will be increased to Rs 400 per KW per month after March 2018 if they do not install meters by then.

Similarly, farmers will have to pay 50% more on unmetered pumpsets/private tube wells while the metered rural domestic consumers will have to cough up 77.87% more than what they are paying now.

Commercial consumers (shops, business establishments etc) will have to pay 14.68% more on an average though the hike for urban commercial consumers is around 10%.

No changes have been made in the power tariff of industries.

Justifying the hefty increase for rural consumers, UPERC acting chairman SK Agrawal said there was a huge gap between cost of average power supply and average revenue realised from villages.

“Since the government aims at increasing the number of rural consumers, giving 2 crore new connections in villages by 2019 under power for all scheme, it will not be possible for UPPCL to provide electricity to villages at the current rate,” he stressed.

He said UPPCL suffered a loss of 74 paise per unit it supplied to consumers largely on account of highly subsidized power to villages.

Agrawal said the commission had also directed UPPCL to lay underground cables in Noida and Ghaziabad in one year to avoid power disruptions due to breakdown of overhead lines in storm, rains etc.

He said shelter homes, orphanges, old age homes and institutions run for mentally retarded and abandoned children had been included under the domestic category taking them out of the institutional category, resulting into reduction of their tariff up to Rs 2 per unit.

Read more: UPPCL tightens noose around meter readers issuing incorrect bills

“We have also directed UPPCL to reduce their aggregate and technical losses to 15% from the prevailing 35% by 2018-19 so that the burden of their inefficiency is not passed on to consumers every time,” he stressed.

UP Rajya Vidyut Upbhokta Parishad president Awadhesh Kumar Verma criticized the tariff hike, especially for rural domestic consumers and farmers. “There is no justification for giving a tariff shock to consumers of any category and we request the regulator to review its order,” he said.