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Your power bill is up 22%, more hikes to follow

delhi Updated: Aug 27, 2011 01:54 IST
Avishek G Dastidar
Avishek G Dastidar
Hindustan Times
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From next month, Delhiites will have to pay much more for electricity.

The Delhi Electricity Regulatory Commission (DERC) has finally ended all speculation and, after more than a year’s wait, come out with a 21.77% hike in the power tariff in the Capital.

The last tariff hike (6.6%) was in 2005-06.

That’s not all. The next few years could also see the tariff increasing as the actual quantum of the hike is a whopping 80% but is being spread over the next few years to spare consumers the shock, said DERC chairman PD Sudhakar on Friday. The DERC has not taken a call on when the remaining portion of the hike will be recovered.

On top of this, as a double whammy, the DERC has also introduced the system of the Fuel Cost Adjustment mechanism, which is likely to put an additional surcharge on power bills every quarter. This is the variation in the fuel cost discoms pay to power producers over and above the cost of power.

The tariff hike has been arrived at after factoring in part of the past dues to discoms that they need to recover from consumers through tariff and their budget for supplying power next year.

In money terms, the 80% hike translates into around Rs6,000 crore that needs to be recovered from consumers by way of tariff increases in the coming years.

It is a blanket victory for the private power distribution companies —Reliance and Tata — which have been lobbying hard for at least a 50% hike, claiming mounting losses and escalating power purchase costs.

Justifying the hike, the DERC chairman said power could not remain insulated from the overall inflation in the country. Citing figures from the rising Wholesale Price Index and gas and coal prices, he said the quality of power supply in Delhi has improved a lot in the regime of private discoms.

Citing a surplus of Rs3,577 crore in the future, the previous regime of the DERC had proposed a tariff reduction of at least 20% last year before the whole process was stalled by the Delhi government.

The current members of the DERC found the previous estimates “unrealistic” as none of the projections leading to such a surplus have come true.