In a significant relief for consumers across Uttar Pradesh, the state electricity regulator has announced no increase in power tariffs for the sixth consecutive year, while simultaneously implementing a comprehensive five-year plan to reduce distribution losses and promote renewable energy adoption.
Tariff Freeze and Regulatory Surplus
The Uttar Pradesh Electricity Regulatory Commission (UPERC) issued its tariff order for the fiscal year 2025-26 on Friday, maintaining current electricity rates across all consumer categories. This marks the sixth straight year without any power tariff hike in India's most populous state.
The regulatory body confirmed that the tariff freeze is financially viable due to UP Power Corporation Ltd (UPPCL) projecting an accumulated regulatory surplus of Rs 18,592.38 crore as of April 1, 2025. This substantial surplus effectively eliminates the need for any immediate tariff increase, providing continued financial relief to both domestic and commercial consumers.
Green Energy Initiatives and Loss Reduction Targets
In a move toward sustainable energy practices, UPERC has expanded the Green Energy Tariff option to all electricity consumers. The commission has also reduced the additional green energy surcharge from Rs 0.36 per unit to Rs 0.34 per unit for high-voltage consumers, while establishing a fixed rate of Rs 0.17 per unit for low-voltage consumers.
The regulator has set an ambitious distribution-loss trajectory spanning from FY 2025-26 through FY 2029-30. DISCOMs have been directed to reduce losses from the current 13.78% in FY 2024-25 to 10.74% by FY 2029-30, representing a significant improvement in operational efficiency.
Financial Approvals and Performance Review
For the upcoming fiscal year, UPERC has approved an Annual Revenue Requirement (ARR) of Rs 1,10,993.33 crore for the purchase of 163,778.24 million units of electricity. This approval comes slightly below the DISCOMs' projection of Rs 1,12,865.33 crore for 164,592.49 MU.
The commission has set the approved distribution losses for FY26 at 13.35%, significantly lower than the 13.77% proposed by DISCOMs. The state government will continue its support through subsidies amounting to Rs 17,100 crore for the fiscal year 2025-26.
Performance analysis revealed that only Madhyanchal and Paschimanchal DISCOMs successfully met their FY 2024-25 distribution-loss targets, while PuVVNL and DVVNL emerged as the poorest performers in the state.
Consumer Protection and Future Initiatives
UPERC has addressed several consumer-centric issues in its latest order. Licensees are now required to display power factor on consumer bills where kVAh billing applies and must issue TDS certificates for tax deducted on interest paid against security deposits.
The commission also announced plans to release a consultation paper addressing recurring billing and service issues faced by consumers in multi-storey buildings and townships. These problems, repeatedly highlighted during public hearings, include single-point connections, irregular billing, and lack of transparency in service delivery.
Time-of-day tariff categories and time periods remain unchanged from the previous year, while cross-subsidy surcharges for open-access consumers have been rationalized and reduced for certain categories.
The state government has committed to maintaining subsidies for lifeline consumers, including rural and urban households, rural scheduled metered consumers, and private tubewells at the same levels as the previous year, ensuring continued protection for vulnerable segments of the population.
