UPPCL revises revenue need, consumers likely to get relief

LUCKNOW: In a move that may give some relief to consumers from an impending tariff shock, the UP Power Corporation Ltd (UPPCL) has revised its annual revenue requirement (ARR) downward after the regulator and others pointed out several anomalies in the proposal.

The step is bound to force the corporation to revise its tariff proposal accordingly since tariff revision is sought on the basis of the ARR. The ARR is a statement containing the revenue and expenditure expected by the licencee during the given financial year. An increase in tariff is allowed to the extent it helps the corporation fill the revenue deficit.

In its revised proposal to the UP Electricity Regulatory Commission (UPERC), the UPPCL, according to sources, has reduced the ARR to Rs 66,078 crore from Rs 70,461 crore, down by Rs 4383 crore.

Now, its projected revenue gap during the current financial year has come down to Rs 16,257 crore from Rs 19,616 crore.

To arrive at the new ARR figure, the UPPCL has reduced the average power purchase cost by 21 paise per unit. Now, the power projections have been made at Rs 3.90 per unit against Rs 4.11 per unit as projected in the original ARR.

The UP Rajya Vidyut Upbhokta Parishad, a power consumers’ body, has demanded action against the UPPCL management for preparing the original ARR based on “concocted figures to unnecessarily burden consumers”.

“The ARR that the UPPCL has now revised proves that the original proposal was based on concocted revenue-expenditure figures to maximise the profit by getting a steep tariff hike done,” Parishad president Awadhesh Kumar Verma alleged.

Verma also demanded chief minister Yogi Adityanath to see to it that the UPPCL now revised its tariff proposal in light of the revised ARR.

Verma has been claiming for long that the power purchase and other statistics quoted by the UPPCL in the original ARR were designed to fleece consumers.

The UPPCL’s move to revise the ARR comes a week before the UPERC was going to start a public hearing on the tariff hike proposal before the commission announces its tariff order in December. The UPPCL has proposed an average tariff increase of around 24% for the year 2017-18. While a 12 % hike has been sought for the urban domestic consumers, the highest hike has been sought with regard to farmers and rural domestic consumers, which is 70%-350%.

Even the regulator termed the proposal as one that could give a tariff shock to the consumers and had asked the UPPCL to have a relook at projections made in the ARR.

The UPPCL, according to sources, has claimed in the revised ARR that it might not add as many consumers to the network during the year as it earlier expected hence its power purchase requirement as well as the expenditure on the same had changed, requiring a revised ARR.

The ARR that the UPPCL has now revised proves that the original proposal was based on concocted revenueexpenditure figures AWADHESH KUMAR VERMA, Vidyut parishad member