During the current fiscal year 2023-24, power tariff for all categories of consumers in Uttar Pradesh may increase by 8-10 per cent due to the implementation of the Revamped Distribution Sector Reform Scheme (RDSS), a centrally sponsored scheme.
Under this scheme, power distribution companies will pass on part of the burden of aggregate technical and commercial losses to consumers, while the rest will be borne by the company.
Although the RDSS was approved by the Union cabinet in June 2021, the component of passing on the burden of line losses to consumers was recently added, and the Union energy ministry has asked state governments for their comments until May 11.
The UP government had previously announced an ambitious ‘Revamped Distribution Sector Scheme’ in its budget for 2022-23 with an outlay of Rs 31,000 crores in association with the central government, with a provision of Rs 5,530 crores. The goal of the scheme is to improve the quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector.
Avadesh Verma, a member of the state advisory committee on power, stated that the Union energy minister is considering amendments to the Indian electricity rules 2003 to pass on the burden of line losses to power consumers.
With the amendments, the trajectory of line losses would be determined for each power distribution company, and directions will be issued to state power regulators to include the cost of line losses in power tariffs, which will be mandatory for the power regulators to comply with.
Under the proposed amendment to the Indian electricity rules 2003, almost half of the burden due to line losses will have to be borne by power consumers and the rest by the distribution companies.
The Union government launched the RDSS with an outlay of Rs 3,03,758 crore and an estimated budgetary support of Rs 97,631 crore for the duration of 5 years from FY 2021-22 to FY 2025-26.