#uperc

The Uttar Pradesh Electricity Regulatory Commission has begun hearing UPPCL’s major thermal power procurement petition.

The matter is Petition No. 2338 of 2026.

UPPCL is seeking approval to procure 4,000 MW of thermal power capacity.

The capacity will come from new projects.

The procurement is proposed under the DBFOO model.

The tenure will be 25 years.

Procurement structure

DBFOO stands for Design, Build, Finance, Own and Operate.

Under this structure, the developer builds and operates the project.

UPPCL commits to long-term power purchase under a PPA.

Fuel is proposed to be sourced through the SHAKTI Policy B(iv) route.

This gives the procurement a structured coal-linkage framework.

Why this matters

Uttar Pradesh is India’s most populous state.

It is also one of the country’s largest electricity consumers.

The state has historically faced peak supply pressure.

A 4,000 MW thermal procurement would provide dedicated baseload capacity.

This is important as demand rises and renewable energy creates larger balancing needs.

Long-term commitment

The proposed 25-year tenure is significant.

It gives developers long-term revenue visibility.

It also locks UPPCL into a long-term tariff framework.

This can improve supply security but also creates a multi-decade cost obligation.

The regulator will therefore examine consumer interest carefully.

Interventions filed

JSW Energy has filed an intervention.

Lalitpur Power Generation Company Limited has also filed an intervention.

Both have raised objections to key bid conditions.

Their participation shows that the proposed procurement has sector-wide importance.

Key objections

The objections relate to three major bid conditions.

The first is the restriction to new projects only.

The second is the mandated 800 MW unit size.

The third is the 2,400 MW cap per bidder.

These conditions could affect the number of eligible bidders and the final tariff discovered.

New-project restriction

The restriction to new projects excludes existing plants or expansion opportunities.

Interveners may argue that existing or expansion-ready capacity could deliver power faster.

They may also argue that excluding such options reduces competition.

UPERC will need to assess whether UPPCL’s new-project-only condition is justified.

800 MW unit size

The mandatory 800 MW unit size is another important issue.

Large supercritical units can provide efficiency benefits.

However, this requirement may limit bidder participation.

Not all developers have access to projects that match this exact configuration.

The Commission will examine whether this condition supports efficiency or restricts competition.

2,400 MW bidder cap

The 2,400 MW cap per bidder is also under scrutiny.

Such a cap can prevent concentration of supply with one developer.

But it may also restrict scale benefits for large players.

The Commission will need to balance competition, supply security, and tariff efficiency.

Strategic message

UPPCL’s 4,000 MW DBFOO thermal procurement is one of India’s largest state-level baseload capacity initiatives in recent years.

The case will test how regulators balance long-term supply security, competitive bidding design, developer eligibility, and consumer tariff protection.

UPERC’s decision on JSW Energy and Lalitpur Power’s objections could shape future thermal procurement structures across other states.

Uttar Pradesh’s FY 2025–26 LMV tariff schedule arrives with the appearance of continuity—unchanged slabs, familiar LMV categories and a steady rural–urban structure. But beneath this stable exterior lies a significant operational shift. The schedule, issued by UPPCL on behalf of all state DISCOMs, embeds UPERC’s determinations into a tariff framework engineered for compliance, not just pricing.

The document spans domestic, commercial, agricultural, institutional, EV charging and public lighting categories. While headline rates stay largely unchanged, the underlying philosophy moves away from simple retail structuring and toward stronger enforcement of consumer behaviour, contracted load discipline and metering integrity.

A Tariff Book Built for Enforcement

The FY26 schedule tightens rules around maximum demand (MD), penalties for exceeding contracted load and the long-debated kW-to-kVA conversion. Rounding rules, power factor norms and metering access requirements are spelled out with sharper precision than in previous years. For DISCOM executives, the intent is unmistakable: reduce under-reporting, clamp down on leakages and ensure measurable compliance at the field level.

Unmetered segments and inconsistent MD capture—areas historically linked to revenue loss—receive some of the strongest wording in the schedule. This transforms the FY26 LMV structure into a practical enforcement roadmap rather than a static rate card.

A Subtle Redesign of Subsidy Logic

While the Government of Uttar Pradesh continues supporting rural and agricultural consumers, the FY26 document draws a firmer link between subsidy recognition and verified metered consumption. Lifeline eligibility and category purity now matter more than ever, pushing DISCOMs to maintain cleaner databases and enforce accurate classification.

This quiet shift signals that subsidy optimisation will increasingly rely on data accuracy rather than broad policy assumptions.

Continuity for Consumers, Stricter Scrutiny for Everyone

Public institutions, street lighting systems, commercial users and EV charging operators see continuity in headline tariff levels. But oversight tightens across load reporting, TOD applicability and documentation standards. EV charging, in particular, receives clarity on category treatment without any promotional pricing—reflecting UPERC’s view that the segment must operate at system-cost parity.

A governance-level change also stands out: deemed franchisees are now bound by clearer reporting rules and penalties for non-disclosure, bringing them closer to the formal audit framework.

The Real Story: Discipline, Documentation and Data Integrity

FY26 does not reshape tariff levels—but it does reshape expectations. The new LMV schedule links tariff realisation to compliance discipline, accurate reporting and operational transparency. Uttar Pradesh has opted for a quieter tariff year on the surface, but a structurally consequential one underneath.

For a sector where financial health depends on field execution, FY26 may become the year when the tariff schedule moved from being a pricing document to becoming a governance instrument.