Uttarakhand Electricity Regulatory Commission Tariff Order for FY 2026-27

Overview of the Regulatory Decision

The Uttarakhand Electricity Regulatory Commission (UERC) has issued its Tariff Order for the financial year 2026-27 (FY 2027), effective April 1, 2026. The Commission has approved no general tariff hike for the upcoming period, rejecting the significant upward revisions proposed by state utilities.

Uttarakhand Power Corporation Limited (UPCL) initially sought a 16.23% tariff increase, which was subsequently revised to 17.40% during the proceedings. When accounting for the claims of UJVNL and PTCUL, the aggregate proposed hike reached 18.86%. Following technical scrutiny, the Commission determined an approved Aggregate Revenue Requirement (ARR) for FY 2026-27 of ₹12,489.54 Crore, significantly lower than UPCL’s claimed ₹14,731.98 Crore. The decision to maintain existing rates is underpinned by the Commission’s projection that current tariffs will generate a revenue surplus of ₹100.87 Crore for the utility. The approved Average Cost of Supply (ACOS) has been set at ₹7.60/kWh, as opposed to the ₹8.79/kWh projected by the petitioner.

Industrial Category (RTS-5) Tariff Restructuring

The UERC has implemented a structural reclassification of the industrial tariff to incentivize higher capacity utilization. A central component of this restructuring is the modification of the Load Factor (LF) threshold for HT Industrial Consumers.

Load Factor (LF) Threshold and Rate Adjustments The Commission has increased the LF threshold from 40% to 50%. This adjustment penalizes lower utilization while providing a decreased energy charge for consumers operating at higher load factors. The following table illustrates the shift from the previous regime to the newly approved structure:

*Previous rate applied to consumption up to 40% LF. **Previous rate applied to consumption above 40% LF.

Fixed and Demand Charges Demand charges for industrial categories remain unchanged. For contracted loads up to 1000 kVA, the charge is ₹410/kVA of billable demand; for loads exceeding 1000 kVA, the charge is retained at ₹480/kVA.

Seasonal Consumer Sub-category The Commission has introduced a “Seasonal Consumer – Hotel & Restaurant” sub-category. Under this provision, if maximum demand during off-season months is below 10% of the Contracted Demand (CD), fixed charges are computed at 10% of the CD. If demand exceeds 10%, standard rate schedules apply.

Operational Surcharges and Rebates for Industrial Consumers

To align with modern grid requirements and renewable energy mandates, the Commission adjusted several operational surcharges and rebates. All percentage rebates listed below apply specifically to Energy Charges.

• Continuous Supply Surcharge: Reduced from 15% to 7.5%, citing improvements in the state’s power supply stability.
• Solar Hour Rebate: A new 22.5% rebate has been introduced for LT and HT industrial consumers with loads exceeding 25 kW. This applies to consumption between 9:00 AM and 5:00 PM.
• Green Power Tariff: The Commission approved a Green Power Tariff of ₹0.39/kWh, payable by consumers opting for 100% renewable energy procurement.
• Voltage Rebates: Incentives for supply at higher voltages have been increased:
  • 33 kV: Increased from 3.5% to 4.5%.
  • 132 kV and above: Increased from 7.5% to 8.0%.
• Time of Day (ToD) Surcharge: The Peak Hour Surcharge is retained at 30% of the normal tariff.

Status of Domestic and Commercial Categories

Tariffs for the Domestic (RTS-1) and Non-Domestic/Commercial (RTS-2) categories have been largely retained to ensure price stability, with specific structural shifts for bulk and institutional consumers.

• RTS-1 Single Point Bulk Supply: Energy charges were reduced from ₹7.50/kVAh to ₹6.25/kVAh to align with the Average Billing Rate (ABR) of other domestic categories.
• RTS-1A Snowbound Areas: Concessional rates for domestic consumers in snowbound regions are retained at ₹1.85/kWh with a fixed charge of ₹18/connection.
• Domestic Energy Charge Slabs (Retained):
  • 0-100 units/month: ₹3.65/kWh
  • 101-200 units/month: ₹5.25/kWh
  • 201-400 units/month: ₹7.15/kWh
  • Above 400 units/month: ₹7.80/kWh
• Commercial Category Reclassification: “Government/Government Aided Educational Institutions” have been shifted to the “Other Non-Domestic” (RTS-2) category. Subsidized rates are retained only for those with loads up to 10 kW.
• Prepaid Metering Rebates: A 4% rebate is approved for the Domestic category and 3% for all other categories using prepaid meters.

Institutional Directives and Efficiency Targets

The UERC has issued comprehensive directives to UPCL to improve financial transparency and operational performance.

• Distribution Loss Target: Set at 12.25% for FY 2026-27. UPCL is directed to constitute a standing committee to monitor the 10 highest-loss feeders and devise performance improvement action plans.
• Organizational Restructuring: UPCL must identify each Electricity Distribution Circle (EDC) as a separate Strategic Business Unit (SBU) and treat each Division as an independent Profit Centre. Monthly budget requirements must be submitted to the Head Office and monitored against the approved ARR.
• CapEx Impact Study: UPCL is required to conduct a technical study for each division to analyze the impact of Capital Expenditure on performance metrics, specifically billing and collection efficiency.
• Financial Accountability: The Commission directed UPCL to prioritize the recovery of outstanding dues, which exceeded ₹3,163 Crore as of late 2025.
• Consumer Orientation: UPCL must organize orientation sessions to educate consumers on utilizing the “Smart Meter APP” for real-time data access.