DERC-distcom war grounds tariff order | delhi | Hindustan Times
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DERC-distcom war grounds tariff order

delhi Updated: May 06, 2010 00:24 IST
Avishek G. Dastidar
Avishek G. Dastidar
Hindustan Times
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It’s an open war between Delhi government and the Delhi Electricity Regulatory Commission (DERC) over the fixing of electricity tariff this year even as CM Sheila Dikshit faced flak from all quarters for stalling the tariff order process.

Sources said on Wednesday the power department and DERC remained busy looking up suitable interpretations of Section 108 of the Electricity Act 2003, invoking which the government had stalled the declaration of tariff a day ago.

“We will review the situation with all distcoms and the DERC soon,” said Dikshit.

While the government is certain that this legal tool, which Delhi used for the first time, gives it overriding powers over DERC in “policy matters”, what is causing a concern in its camp is the presence of certain other interpretations of this Section that suggests otherwise.

Legal interpretations from various quarters, including one by the Supreme Court and another by Attorney General of India G.E. Vahanavati, seem to suggest, sources said, that tariff fixation is outside the area of “policy matters” and that even if directions are issued by the government after invoking this Section, they might not be binding on the regulator.

In other words, the fight now is over the government (backed by the distcoms) can stop the DERC from declaring a tariff order they had been ready with for a month now.

Tariff is ideally a sole jurisdiction of the regulator as an autonomous body.

The distcoms meanwhile went to town all day saying that they did not make profits during the financial year 2009-10.

Speculation was rife that the DERC was ready to decrease tariff to some extent—marginally for domestic sector and substantially for the industrial buyers, who pay more for power, to bring parity and move towards ending cross-subsidy of power tariff.

Audited accounts of the three distcoms accessed by HT show they were in a combined revenue surplus of around Rs 1,600 crore even as distcoms separately objected to this number.

In 2009-10, BSES Rajdhani, the biggest distcom for instance, made net sales of energy of around Rs 4,463 crore and made purchase of energy of around Rs 4,122 crore, translating into a profit of Rs 341 crore.

The company’s earnings per share increased from to Rs 4.06 from a negative figure in the earlier year.

But government sources and the distcoms said that power purchase is not the only expense in operations.

“Much of what is being considered a surplus is money that we have not got yet but we need the cash to meet expenses now,” said a distcom official on the condition of anonymity.

In this complex web of claims and counterclaims, the tariff order is suspended indefinitely.