UP govt asks state’s power regulator to make changes in tariff structure

At a time when the UP Electricity Regulatory Commission (UPERC) was giving the final touches to its tariff order for 2021-22, the state government has directed it to make certain changes in the existing tariff structure. The government has also convened a meeting in this regard here on June 21, asking the power regulator to attend it.

The move, according to people aware of the issue, may spark off a controversy with the UPERC, a quasi-judicial body, already feeling miffed with the government holding a meeting on the issue related to tariff revision which is supposed to be the regulator’s exclusive jurisdiction.

The government has issued directions to the UPERC exercising its powers under Section 108 of the Electricity Act 2003 that empowers the state government to issue directions to the electricity regulator in matters of policy involving “the public interest”.

The directions came through a letter written and signed by under-secretary, energy, Anand Kumar Tripathi on June 15.

“I am directed to convey that a meeting has been convened under the chairmanship of additional chief secretary, energy, here on June 21 to discuss government directions to the UPERC under the section 108 of the Electricity Act, 2003 to discuss classification of sub-tariff slabs under the LMV-2 and the LMV-6 categories,” the letter says.

The LMV-2 and the LMV-6 categories pertain to the power looms and the commercial consumers, respectively.

Apart from the UPERC secretary, others who have been invited to the meeting are additional chief secretary, handloom development, the UP Power Corporation Ltd (UPPCL) chairman and the UPPCL managing director.

“The UPERC has taken exception to the government issuing directions to it under section 108, asking it not only to make changes in the tariff structure but also attend the meeting on the subject,” a commission official said, adding, “The UPERC may not send any of its official(s) to attend the meeting.”

The date and timing of the government’s proposed meeting coincides with the date and timing of the State Advisory Committee’s (SAC) meeting called by the UPERC to discuss the annual revenue requirement (ARR) proposal before issuing the tariff order by June end.

SAC member Awadhesh Kumar Verma said the additional chief secretary (energy), the UPPCL chairman/MD were among the SAC members. “They could have discussed the issue in the SAC meeting instead of convening a separate meeting the same day and thus avoided the unnecessary controversy,” he said. “The section 108 cannot be invoked for things like calling meetings,” he added.

Section 108 of the Electricity Act, 2003, however, gives supremacy to the government when it comes to decide whether a matter on which it has issued directions to the regulator is of “public interest” or not.

The clause 1 of section 108 says, “In the discharge of its functions, the State Commission shall be guided by such directions in matters of policy involving public interest as the state government may give to it in writing.”

And the sub-clause of the same section adds, “If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the state government thereon shall be final.”