Power tariff hike: Discoms finally get desired raise | delhi | Hindustan Times
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Power tariff hike: Discoms finally get desired raise

delhi Updated: Aug 27, 2011 00:32 IST
Avishek G Dastidar
Avishek G Dastidar
Hindustan Times
Highlight Story

It is dream come true for Delhi’s power distribution companies, which have finally got the kind of tariff hike they have been seeking from the power regulator for years.

In effect, an 80% hike means all their demands—most expenditure calculations, and future projections for running the business—have been approved, leaving no scope for complaints.

In all, a total of R6,000 crore has been approved as recoverable through tariff. But this year only Rs 1,200 crore has been recovered, leaving around Rs 4,800 crore hanging.

When the entire money will be recovered is not of much concern anymore because, as Delhi Electricity Regulatory Commission (DERC) members hinted on Friday, if the remaining amount is kept hanging for long, future consumers
will end up bearing the brunt of past dues, which is not desirable.

But defending itself, DERC said that it did not bow down to the discoms’ wish-lists.

“We have knocked off around Rs 5,000 crore from the total list of recoverable from both true-up petition as well as the aggregate revenue requirement,” said PD Sudhakar, chairman, DERC. Part of the hike is also the result of the latest Appellate Tribunal of Electricity (ATE) order of July that allowed the truing up of some amount that was not trued up previously. But DERC said that it has challenged one of the ATE orders at the Supreme Court.

While pressing for a hike in tariff, the discoms have been saying that power purchase costs have gone up 200%

since privatisation and that has made the companies unviable thanks to tariff increasing by just about 15%.

“This is the first significant tariff hike to take place in Delhi in the last 5 years. During this period, the cost of purchasing power, which constitutes more than 80% of a discom’s cost, has increased by over 100%,” said a BSES spokesman.

The North Delhi Power Limited said that a large part of the past costs “still need to be recovered. These costs have to be financed through loans”.

While determining the tariff, the commission has debunked the prevailing theory of the previous regime of the DERC that estimated a revenue surplus of Rs 3577 crore and wanted to slash tariff by about 20%.

The DERC now says that none of those assumptions were realistic and the projections of surplus power did not come true.