The Uttarakhand Electricity Regulatory Commission has issued a significant tariff order for UJVN Ltd. dated March 30, 2026, bringing important financial adjustments and operational guidelines for the state’s hydroelectric power sector. The order covers the true-up of financials for the financial year 2024-25, a performance review for 2025-26, and the determination of Annual Fixed Charges (AFC) for 2026-27.
One of the key highlights of the order is the Commission’s detailed prudence check of expenses claimed by the utility. During this process, several costs were either disallowed or reclassified. The Commission rejected certain Corporate Social Responsibility (CSR) expenses and shifted some capital expenditure items to Repair and Maintenance (R&M) expenses. It also cautioned the utility against misclassification of expenses in the future. As part of the financial true-up for 2024-25, UJVN Ltd. has been directed to refund a surplus amount of around Rs. 22.44 crore to Uttarakhand Power Corporation Limited.
The order also highlights the ongoing issue related to transmission assets. The Commission observed that UJVN Ltd. continues to maintain assets that should ideally be transferred to Power Transmission Corporation of Uttarakhand Ltd. Despite earlier instructions, the transfer process has not been completed due to technical challenges in separating the assets. The Commission has made it clear that only expenses directly related to power generation will be considered valid under the current regulatory framework.
For the upcoming financial year 2026-27, UJVN Ltd. has proposed an increase of 10.93% in Annual Fixed Charges. This proposal raised concerns among stakeholders regarding transparency and the possible impact on electricity tariffs for consumers. However, the utility maintained that its proposed average tariff of Rs. 2.80 per unit is still competitive and lower compared to other power procurement costs. After reviewing the proposal, the Commission approved the AFC based on revised norms for employee costs, R&M expenses, and administrative charges. Inflation indicators such as the Consumer Price Index at 5.46% and the Wholesale Price Index at 7.23% were also considered in the calculations.
The Commission has further raised concerns over delays in Renovation and Modernization projects at key hydro plants, including those at Dhalipur and Khatima. It warned that any financial losses or damages resulting from these delays would be the sole responsibility of UJVN Ltd. To improve monitoring and accountability, the utility has been directed to submit quarterly progress reports on its projects. It must also maintain detailed records of river discharge data to meet environmental compliance requirements.
Overall, the order sets a strong foundation for improved financial discipline and operational efficiency in Uttarakhand’s hydroelectric sector. As UJVN Ltd. moves ahead with future plans, including the development of 2650 MW of pumped storage projects by 2037-38, the Commission’s directives aim to ensure better transparency, accountability, and sustainable growth in the sector.
Discover more from SolarQuarter
Subscribe to get the latest posts sent to your email.
