UP power tariffs to go up next month

Power tariffs are set to be hiked for the fifth time in a short span. A new tariff structure is likely to be announced by the UP State Electricity Regulatory Commission next month.

The UP Power Corporation (UPPCL) in its Annual Revenue Requirement (ARR) for 2005-06, submitted to the commission in March, asked for a hike of 12"�18 per cent for various categories of consumers.

According to UPPCL Chairman Deepak Singhal, the utility expects to mobilise Rs 600 crore more in 2005-06 through revisions of power tariffs.

UPPCL officials say power tariffs in UP are lower than in several neighbouring states and there is ample scope of further hike.

The corporation is of the view the average cost of supply of power is Rs 4.05 per unit while the average selling cost is only Rs 2.81 per unit. Moreover, the cost of power procurement is likely to go up by 16.87 per cent in two years, while the average hike in power tariffs is just 3 per cent.

Even after five years of reform in the power sector, the financial position of the UPPCL remains grim. In 2004-05 cash losses of the UPPCL were Rs 2,761 crore, that too after it received a subsidy of Rs 1,002 crore from the state government.

The UPPCL maintains there was a subsidy shortfall of Rs 500 crore because the power regulator had asked the state government to pay a subsidy tune of Rs 1,500 crore.

The financial situation has been made further worse by the failure of the power utility to utilise the funds given by the Union power ministry for strengthening the power distribution network.