We have seen Public Notice issued by UPPCL in different news papers of       8th July, 2011. We have also seen Hon’ble Commission’s Order dated 25th June, 2012. We have had internal discussions with our Members & some of the Peer Associations representing Industry in Large Medium & Small Sectors. While we have already submitted our objections / comments – specifically relating to ARR of PVNNL, Meerut and proposed Hike in HV2 rate schedule vide our letter of even reference dated 20th July, 2012, our further comments / objections to the proposed Hike in Electricity Tariff for FY 2012-13 are as under:

1.    For Small and Medium Power (LMV-6), it is proposed to increase Fixed Charges from Rs. 115 to 230 per kw/month (100%) Energy Charges from Rs.4.95/- to Rs. 6.25 per kwh (26%) and Minimum Charges from Rs. 500 to Rs. 800 per kw/month (60 %). In case of Large and Heavy Power, Demand Charges & Energy Charges are proposed to be increased by around 50%. In the present condition, Industries can not bear this steep hike. If implemented, it will very adversely affect the Economic Viability of Industries.

2.    DISCOMs are not supplying power to the Industries to the extent of requirement. This besides, supply remains erratic. Thus the supply of Power is quite poor quantitatively as well as qualitatively. In such a situation there is no justification of levying Minimum Charges on Small and Medium Power (LMV-6). It should be withdrawn.

3.    Total burden of increase is proposed to be put on Industries only. It is not only unjustifiable but also goes against Government’s approach towards Industrial Development of Uttar Pradesh.

4.    UPPCL / DISCOMs have failed to submit their audited accounts for the years 2008-09 onward - even by the last date specified by Hon’ble APTEL Tribunal for electricity (31st January 2012 for 2008-09 &  31st March 2012 for 2009-10). In absence of these audited accounts, the ARRs were not, in fact, ab initio admittable.

5.    Though audited accounts have been submitted up to 2007-08, UPERC has not initiated the true up exercise – this is despite Hon’ble APTEL’s Judgment stating “The State Commission shall initiate the true up exercise up to FY 2006 - 07 immediately, followed by the true up of the FY 2007-08, 2008-09 and 2009 -10 immediately after the receipt of the respective audited accounts.” We suggest that this true up exercise should first be completed before any revision in Electricity tariff.

6.    i.     In the true up petition filed on 28th May 2012, UPPCL has shown     Rs.14638.64 crores as revenue gap and carrying cost of Rs.11352     crores, for the years 2000-01 to 2007-08, for which the audited     accounts have been submitted.

ii.     UPERC has found wide variances among different data submitted by         UPPCL/ DISCOMs at different times – obviously data submitted may         not be taken as reliable for consideration.

iii.    For the above reasons, it is all the more necessary that true up exercise     for the period up to 2007-08 is completed first and actual impact –     quantum of revenue gap and carrying cost is ascertained. It is of vital     importance to know whether govt. has paid for the subsidies for     different categories of power consumers as the burden of cross     subsidy should not be put on Trade and Industry – (LMV2 / LMV6 /     HV2). We suggest that Govt. of U.P. should bear, from State Budget,     100% revenue gap and carrying cost till 31st March 2012. It will     enable UPPCL and its DISCOMs to work on clean slate here after.     DISCOMs have to be made responsible for functioning in line with     performance parameters (including line losses, realization of dues and     equipments’    quality etc.) fixed by UPERC. It needs to be appreciated     that industries may not be made to bear the cost of inefficiency of     Power Utilities if we really want industrial growth in Uttar Pradesh.

7.    Though UPERC is within its right to take up the revision of power tariff suo motto, even without audited accounts for the years 2008-09 to                2011-12, based on provisional figures, in all fairness, it will be proper to complete the true up exercise for the years 2001-02 to 2007-08 before further tariff revision. “Tariff Shock” as mentioned by UPERC will remain what it is even after suo motto revision of tariff.  This “Tariff Shock” should be absorbed by Govt. of U.P. as mentioned by us in Para 6 (iii) here above.

Submitted in 6 copies with the request to please consider our above views and those contained in our letter dated 20th July, 2012, while taking decision for revision in Power Tariff.

(Rajeev Gupta)
AssochamUP

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सुरेन्द्र अग्निहोत्री
agnihotri1966@gmail.com
sa@upnewslive.com