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The Uttar Pradesh (UP) power distribution companies (discoms) have pegged their revenue target for the next financial year 2023-24 at more than Rs 92,000 crore.
The UP Power Corporation (UPPCL) and other discoms have now petitioned the UP Electricity Regulatory Commission (UPERC) to approve their annual revenue requirement (ARR) document to allow them to hike power tariffs.
Discoms had posted a deficit of about Rs 16,000 crore in fiscal year 2020-21 (FY21), while the consolidated accumulated losses were to the tune of Rs 70,000 crore.
Poor revenue realisation, high line losses, and cross subsidy to the priority sector consumers are a few factors that are to be blamed for the sordid state of affairs of the power companies.
According to the fresh ARR proposal, UP discoms have estimated line distribution losses of 14.9 per cent and a revenue gap of Rs 9,140 crore in FY24.
The power companies have sought an average power tariff hike of 15.85 per cent for all categories of consumers. The tariffs, which are among the highest in the country, have not been revised in many years.
Meanwhile, the urban domestic power consumers are set to witness the steepest rise of 18-23 per cent in tariffs if the UP energy regulator approves the ARR proposal. The power tariffs for industry and agriculture sectors are expected to rise by 16 per cent and 10-12 per cent respectively. The highly subsidised power tariff for the below poverty line (BPL) segment is also proposed to be increased by 17 per cent.
However, UP power consumer forum wants the UPERC to reject the ARR proposal alleging the discoms already owed more Rs 25,000 crore to the state consumers.
“In fact, the discoms should effect a 35 per cent reduction in power tariffs in one go or provide a 7 per cent reduction in tariffs annually for the next five years to clear off the entire dues of consumers,” Forum president Avadhesh Kumar Verma told Business Standard.
He maintained that UP discoms were bound to implement power tariff reduction instead of proposing an upward revision in view of the surplus owed to the consumers.
Last year, the highest power revenue losses were clocked by the Agra discom at nearly 38 per cent, followed by Varanasi and Lucknow at 32 per cent each. Similarly, the losses posted in the Meerut discom and Kanpur Electricity Supply Company (KESCo) were pegged at 20 per cent and 16 per cent respectively.
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