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Discoms up pressure for steep tariff hike

india Updated: Jul 17, 2011 23:06 IST
Avishek G Dastidar
Avishek G Dastidar
Hindustan Times
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Just weeks before the power regulator is to come out with a new tariff for electricity, the discoms increased their pressure for a steep tariff hike by voicing their demands at the national level before the apex electricity regulator and power producers.

"If the regulator allows us to recover the Rs 2,000 crore of revenue gap of 2008-09 alone, the increase in tariff will be around 50%. The revenue gap of the subsequent years is even additional," Gopal Saxena, CEO of BSES Rajdhani told the 12th Regulators and Policymakers' Retreat in Goa in the presence of Central Electricity Regulatory Commission chairman Promod Deo and senior officials from various utilities in the power sector. "We can't go on like this. Between the three discoms, we stand under a combined debt of Rs 10,000 crore. Someone will have to do something immediately," the CEO of the capital's biggest discom said.

The annual conference was organised by the Independent Power Producers' Association of India, with the participation of senior officials from state utilities, public sector undertakings, Union Power Ministry and private sector.

Speaking openly for the first time about the regime of the former chairman of Delhi Electricity Regulatory Commission, who retired last year, Saxena said the then DERC chief had created a wrong perception about the discoms' profits.

"I may shout from the tallest buildings about how bad my situation is, but the regulator made one statement about a supposed cash surplus of Rs 3,577 crore and everyone bought it. This cost us dearly," he told a roomful of chairmen, secretaries and other officials from regulatory commissions across the country. No one from DERC had attended the gathering, though.

Explaining that the private discoms had vastly improved the quality of supply and brought down losses for the consumers in Delhi, Saxena said the achievements of privatization were not being appreciated. "Not a glimmer of appreciation for the good work we have done," he said.

As a relief to the discoms, Saxena's views found takers in most of the other senior bureaucrats in the power sector, both serving and retired.

SL Rao, former chairman of CERC said discoms needed to be able to recover their investments through tariff.

"If the tariff is not increased, how will the utilities remain viable?" he said.

Former member of Appellate Tribunal of Electricity HL Bajaj said, "Across the country since 2009, the discoms' costs have gone up by 7% while tariff has increased only by 5.2%."Several speakers said the countrywide revenue gap of discoms on account of non-revision of tariff was Rs 80,000 crore.

Open access at what cost?
The Delhi discom chief also said that if the regulator allowed open access (wherein consumers could buy power from any discom, and even from generators) then big commercial consumers like Delhi Airport and other power guzzlers might get cheaper power directly from generation companies.
"The big commercial buyers are the ones which allow me to cross-subsidise domestic consumers. If my big commercial consumers are gone, someone will have to make up for the lost revenue so I can continue to keep domestic tariff low. I am stuck with long-term power purchase agreements and that is costing me dearly," Saxena said.
(The correspondent was covering the conference at the invitation of the organizers)