UPERC questions 10% fuel surcharge,asks UPPCL to file reply in a week

Lucknow: The Uttar Pradesh Electricity Regulatory Commission (UPERC) has raised objections to the manner in which the Uttar Pradesh Power Corporation Ltd (UPPCL) imposed a 10% fuel and power purchase adjustment surcharge on consumers for June.The commission made it clear that the mechanism cannot be used to recover past liabilities, arrears or one-time settlement costs from consumers.In an order issued on Monday, the commission directed UPPCL to explain within a week why nearly Rs 1,400 crore in old liabilities and past claims were included in the surcharge calculations for March 2026. Uttar Pradesh Rajya Vidyut Upbhokta Parishad (UPRVUP) had filed petition in the regulatory body, highlighting the issue.The move is expected to provide relief to 3.73 crore electricity consumers across the state, who are facing the prospect of an increase in power bills.The commission observed that fuel surcharge is designed to account for month-specific variations in fuel costs, power purchase expenses and transmission charges related to electricity procured and supplied during a particular period.It stressed that the regulatory framework does not permit the recovery of past dues or liabilities.

“Historical arrears, one-time settlements and payments arising from judicial or quasi-judicial proceedings do not qualify as legitimate cost variations attributable to electricity supplied in a specific month. Such expenditures cannot be treated as part of the actual power purchase cost for that period and, therefore, fall outside the scope of the surcharge,” UPERC said.UPERC emphasised that fuel surcharge is an exceptional provision as it allows distribution utilities to recover certain cost variations from consumers without obtaining prior approval for every monthly adjustment.“Given this automatic nature, utilities are expected to exercise caution and ensure strict compliance with regulatory provisions,” the commission said.UPERC also expressed concern that including liabilities arising from court orders, tribunal decisions and settlements of previous years in the surcharge calculation could impose a substantial and unjustified burden on consumers.The commission maintained that this approach is inconsistent with the Multi Year Tariff Regulations, 2025, as well as the broader principles of consumer protection embedded in the regulatory framework.The regulatory body directed UPPCL to submit a detailed explanation within seven days and provide a complete break-up of the surcharge computation.The commission has also sought details of current and past power purchase and transmission charges, payments made under Appellate Tribunal for Electricity orders, and the legal justification for including past liabilities in the surcharge calculation.UPRVUP chairman and Central Advisory Committee member Avadhesh Kumar Verma welcomed the commission’s intervention, saying consumers could have benefited from a reduction of nearly 2% in electricity bills instead of facing an additional surcharge had the calculations been made in accordance with the norms.Verma said UPPCL might have to revise its order and withdraw the additional burden on consumers.