UP headed for a major power tariff revision

Power tariffs in Uttar Pradesh are likely to go up by at least 16 per cent from June next year if the Centre does not extend the stay on the operation of the Indian Electricity Act 2003.

The Act provides for a separation of transmission and trading of power.

At present, public sector power utility UP Power Corporation Ltd is performing both the tasks in UP.

The UP Power Trading Company, set up in April 2004, is set to take over the task of power trading from the UP Power Corporation.

"Five power distribution companies would be forced to file power revisions petitions before the power regulator, as the UP Power Trading Company would charge a minimum 16 per cent return on its turnover from the Discoms," a senior UP Power Corporation official said, adding a 16 per cent return was the norm of the power industry.

The UP Power Corporation Ltd, which buys power from the UP Thermal Power Corporation, the UP Hydro power Corporation, the NTPC, the NHPC and the Nuclear Power Corporation, sells it to five distribution companies.

The Centre had announced the suspension of the Act for one year. The government had earlier promised to review the provision of the Act, but even after one year no such review mechanism has so far been announced.

Sensing the UPA governments' penchant for reforms in power sector, All India Power Engineers Federation, (AIPEF) has given a call for two-day nation wide strike from May 31. Nearly 12 lakh power employees and engineers are likely to go on strike demanding rollback of the Indian Electricity Act, 2003.

The secretary general of the AIPEF Shailendra Dube said, the implementation of the Indian Electricity Act 2003, would be a severe blow for the five Discoms.

UP government should suspend the privatization of the power sector till the Centre settles the issue of power trading, added Dube.