Delhi power regulator starts tariff revision process for 2015-16

New Delhi: Delhi’s power regulator has started the process of revising the tariff for the year 2015-16 at a time when it is engaged in a showdown with the AAP government over a series of hike in power rates in the last couple of years.
Notwithstanding Delhi’s government’s clear indication to it to not hike the tariff further, the Delhi Electricity Regulatory Commission (DERC) kickstarted the process to review the existing rates. “The tariff determination process has started. We are going ahead with the process,” DERC chairman P.D. Sudhakar told PTI.
Top DERC officials said the commission is a quasi-judicial body and is “totally independent” to review the rates after reviewing cost of power and financial condition of the private power distribution companies. The AAP government has been critical of the DERC and had asked it to explain the tariff hike effected by it in the last couple of years while indirectly asking it not to undertake fresh tariff determination process before the Comptroller and Auditor General (CAG) does not complete audit of the discoms. Power tariff was a major issue for AAP during the campaign for Delhi polls.
The Kejriwal government had announced a 50% subsidy on monthly power consumption of up to 400 units in February till the government receives the CAG report on financial condition of the discoms. In its first stint, the AAP government had ordered a CAG audit of all the three discoms, claiming that they have been misleading the government and the DERC about their financial position.
The city has seen a series of hike in power tariff in the past few years. The tariff was hiked by 22% in 2011 followed by five per cent hike in February 2012. The tariff was increased by up to two per cent in May 2012 year and again by 26% for domestic consumers in July 2012. It was hiked by up to 3% in February 2013 and again by 5% in August last year. It was again enhanced up to 7% in November last year.
The private power distribution companies, particularly, The private power distribution companies, particularly, BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd (both of which belong to the Reliance Group), have been demanding significant hike in tariff, citing rise in power purchase cost. Both the discoms supply power in 70% areas in Delhi.
According to DERC figures, the private discoms operating in the city have a revenue gap of whopping `4,000 crore. According to official figures, around 80-90% of total revenue of discoms goes into purchasing power from central and state government owned entities through long term power purchase agreement, at rates determined by the central and state regulators.
The experts said discoms’ cost of buying power from generating companies has increased by around 300% in the last couple of years while the power tariff, in the corresponding period, has risen by around 75%. The cost of buying power has increased primarily on account of an increase in the input prices of raw material like coal and gas, officials said.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
Source: Mint; 02 April 2015
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