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Electricity Pricing in Uttar Pradesh

S Ramesh J L Bajaj The State Electricity Board of Uttar Pradesh, like the Boards in other states, has evolved a tariff structure which aims to cover costs and earn a net rate of return of three per cent on capital. In practice a number of other considerations, too, have determined rates. The result is a complicated tariff structure which is not too clearly governed by any pricing principles nor is based on any accurate calculation of costs. In fact, the Board does not have any data on the various categories of costs, and does not keep separate accounts on generation costs from the different stations. Moreover, its finances are in the red with deficits increasing every year.
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