Not surprisingly, the move has raised the hackles of power engineers and employees' unions of the UP State Electricity Board (UPSEB) who are already on the warpath for the past two months, first over the issue of increasing pay scales and second, over the non-implementation of the revised pay scales by the state government.

According to the agitating employees of UPSEB, the decision to constitute a State Electricity Regulatory Commission (SERC) is a sell-out to the diktats of the World Bank which has made the privatisation of the ailing UPSEB a precondition for the sanction of any loans.

Furthermore, they are alleging that it would not only trigger off the bifurcation of UPSEB (into generation and transmission anddistribution bodies) but would also lead to a substantial increase in power tariffs at the consumer end.

The opponents of the move to privatise the state electricity board expressed apprehension that while such privatisation moves could succeed in other states, the exercise could prove counter-productive in a predominantly agricultural state like UP. This is because once the state government avails a loan from the World Bank in the post-privatisation scenario, it would be bound to increase power tariffs at the staggering rate of 20 per cent annually. "This will not only destroy the state's agro-based economy but will also place power beyond the reach of the average consumer," lamented an agitating powerman.

It may be mentioned that UP has an agricultural load of 36.2 per cent, a domestic load of 24.2 per cent, a commercial load of seven per cent and an industrial load of 23.3 per cent. Of this, the last has been decreasing on account of closure of several industrial units in the past few years in theface of the rapidly deteriorating law and order situation.

The state government, however, feels that the setting up of the SERC would go a long way in improving the power situation in the state. Officials of the state's energy department maintained that SERC's major functions would include fixation of electricity tariffs for different categories of power consumers, transmission facilities and purchase of power from NTPC as well as from other states.

The thrust of the commission, officials stated, would be on creating quality and credibility in the power sector and maintaining continuity. Moreover, state government officials said setting up of the SERC was in accordance with the provisions of the Centre's Electricity Regulatory Commission Act which provides that states can also constitute similar commissions for fixation of power tariffs, generation and transmission of electricity.

What has, however, been glossed over is the fact that according to the World Bank guidelines for the power sector, a SERChas to ensure gradual increase in tariffs for domestic, commercial and agricultural sector consumers while gradually decreasing the rate for industrial consumption. This would in effect mean an estimated increase of Rs 6 to 7 per unit for these categories of consumers over the next few years.

The fact that the SERC in UP would be totally at the mercy of the World Bank diktats is evident from the fact that the commission once formed, would take up the task of securing a Rs 3,500 crore loan for the power sector on a priority basis, of which Rs 3,200 crore is proposed to be spent on restructuring of the power sector.

In a related development, the state cabinet has awarded the 2,000-mw power project at Prabatpur in Allahabad to Washington-based based ISN International. The project is expected to be completed in five years.