Discoms in Uttar Pradesh mull DBT mechanism
Under the proposed system, consumers will have to pay the full bill to discoms at the normal tariff and the state government will give subsidies directly to the consumers
LUCKNOW With the UP Electricity Regulatory Commission (UPERC) repeatedly emphasising on the need for introduction of direct benefit transfer (DBT) system in the power sector, discoms in UP are working out a mechanism for direct transfer of power subsidies to the targeted consumers, including farmers.
The UP Power Corporation Ltd (UPPCL), which owns five discoms in the state, may submit an action plan to the regulator in this regard in November, when it files the annual revenue requirement (ARR) petition for 2024-25, said officials.
“Initially, the DBT in the sector may be started as a pilot project in a district or a zone, instead of the entire state, to assess its results. But it has to be done as the Centre is also asking for DBT of power subsidies,” said an energy department official.
Under the proposed system, consumers will have to pay the full bill to discoms at the normal tariff and the state government will pay subsidies directly to the consumer. Currently, the state government provides subsidies discoms in lieu of which discoms charge a lower tariff from consumers and make up for the loss from government subsidies.
In its tariff order last week, the UPERC had asked discoms to submit the roadmap for DBT in their ARR filling. The commission had also asked discoms for the DBT system in 2020 and had been pushing for it since.
“In view of ensuring transparent utilisation of public resources by way of subsidy, the petitioners are directed to prepare a scheme for transfer of subsidy in a transparent manner with the approval of the state government to be implemented with effect from April 1, 2022,” the regulator had said then.
Reiterating its old stand, the commission in its tariff order on Thursday directed petitioners (discoms) to submit a roadmap for DBT in their next ARR filing for its consideration subject to meeting the provisions under Section 65 of the Electricity Act, 2003, wherein the subsidy amount is to be provided to discoms by the government in advance.
In UP, the state government shells out around ₹15,000 crore as subsidies to discoms to keep power tariff lower for certain consumer categories such as agricultural, lifeline (poor), rural domestic, power handlooms etc.
In 2022-23, the state government had provided a subsidy of ₹14515.66 crore to discoms. Agra, Lucknow, Meerut and Varanasi got subsidies of ₹3770.27 crore, 3304.54 crore, 3777.71 crore, respectively, while KESCo needed none in the same year.
