DERC chief says any power tariff review will take 3 months | delhi | Hindustan Times
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DERC chief says any power tariff review will take 3 months

delhi Updated: Dec 30, 2013 22:13 IST

The Delhi electricity regulatory commission which decides power tariff in the city has not yet received any request from the city government to cut power rates and it may take at least three months for reviewing the existing charges if such a proposal is made.

The Aam Aadmi Party in its manifesto had promised to cut tariff by 50% and chief minister Arvind Kejriwal on Saturday had said a decision on the issue will be made in four-five days.

DERC chairman PD Sudhakar said government has not yet contacted the regulator on the issue of power tariff.

"The government has not contacted the DERC on the power tariff issue. We are not reviewing the existing tariff structure," he told PTI.

He said it may take at least three months for the DERC, a quasi-judicial body, to review the existing tariff as the regulator will have to undertake the set procedure which includes calling all stakeholders for public hearing before deciding the rates.

Power experts said government will have to take the subsidy route to implement the promise of slashing tariff as that will be an executive decision.

As per estimates, government will have to incur an annual expenditure of around Rs 5,000 crore if it decides to halve the power rates for around 40 lakh domestic consumers.

According to DERC figures, the three private discoms operating in the city have a revenue gap of whopping Rs 19,500 crore. Power experts said any move to cut tariff will adversely impact the operation of the discoms in the city.

As per 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 two years while the power tariff, in the corresponding period, has risen by around 70%.

"This virtually non-cost reflective retail tariff has led to a huge build up of future receivables (regulatory assets) to the tune of over Rs 19,500 crore, impacting the sustainability of operations of the Delhi discoms," said an expert.