The power situation in Delhi has become quite precarious despite the government reducing the electricity bills of consumers by announcing a subsidy. Delhiites are once again facing another tariff hike with the power regulator announcing an increase in the power purchase cost adjustment.
The Aam Aadmi Party (AAP), which had promised to bring down power tariff by 50%, fulfilled it by providing a subsidy to the discoms and hence footing the bill itself and halting some developmental projects.
According to sources, the finance department has projected a subsidy of over Rs600 crore in the revised estimates of 2013-14. If the government wants to continue providing subsidy throughout the year, it will have to provide at least Rs3,500 crore.
The Delhi Electricity regulatory Commission (DERC) approved a quarterly power purchase cost adjustment (PPAC) sought by the three power distribution companies on Friday for the October to December quarter. The hike would reflect in February to April bills.
"This is a failure of the power regulator having recognised expenditure in the past they should have given tariff hike accordingly from time to time. Instead, they have led the overdues position to reach almost Rs20,000 crore. It is unfair for today’s consumers to be paying for yesterday’s consumption," said Shakti Sinha, former power secretary, Delhi government.
However, apart from an increase in the power bills, the power situation is likely to deteriorate in the future as the discoms are running out of funds and hence are in no position to purchase power from the generating companies.
"The banks who have been lending money to us are ‘alarmed’ by Delhi government’s subsidy led approach to tariffs, regardless of actual cost of power. They need to bring in cost-reflective power tariff if they want to provide uninterrupted power supply to Delhiites," said a discom official.
The situation is made worse by the fact that BSES Yamuna Power Limited and BSES Rajdhani Power Limited, who cater to 70% of areas in the city, owe around Rs4,000 crore to Delhi government-run power generation and transmission companies.
Delhi government too, condemned the move and said that since an audit by the Comptroller and Auditor General (C&AG) into the accounts of private distribution companies is already under progress the move was uncalled for.