Discoms improving operating costs: DERC

According to the commission, which is an independent quasi-judicial body that fixes power tariffs in the city, and the Delhi government, the regulatory assets have remained below ₹10,000 crore consecutively in the last four years.

Over the last seven years, the gap between the revenue earned and expenses incurred by power distribution companies (discoms) in the national capital has shown a steady decline, the Delhi Electricity Regulatory Commission (DERC) has said.

Over the last seven years, the gap between the revenue earned and expenses incurred by power distribution companies (discoms) in the national capital has shown a steady declinePhoto by Sakib Ali /Hindustan Times)

This “gap” is called the discoms’ Regulatory Assets (RA) and a decline would mean that the companies’ financial health in terms of operating costs was improving.

“The primary reason for the decline in RAs is the 8% surcharge that is being levied on every electricity consumer in the city aimed at liquidating this amount. The surcharge has helped in a way that no new regulatory assets have been created by any of the four discoms in Delhi over the past eight years or so,” said DERC chairperson, Justice (retired) SS Chauhan.

The 8% RA was levied from 2012, to compensate for losses that the power distribution companies suffered.

According to the commission, which is an independent quasi-judicial body that fixes power tariffs in the city, and the Delhi government, the regulatory assets have remained below ₹10,000 crore consecutively in the last four years.

Delhi has nearly 6 million consumers, out of which about 4.9 million fall under the domestic category. The government estimates suggest that so far, the discoms have been able to liquidate over ₹10,000 crore ever since the surcharge was levied. Power in the city is supplied by the discoms BSES Rajdhani Power Limited, BSES Yamuna Power Limited, Tata Power Delhi Limited and the New Delhi Municipal Council.

Chauhan said that the surcharge ensures liquidation of the accumulated assets to the tune of at least ₹2,000 crore annually. Besides, electricity connections are increasing at the rate of about 4%, which is adding to the revenue.

The Delhi government said in the past five years, discoms have reduced losses from around 20% to 9%, the benefit of which has been used towards amortisation of RAs. “A major reason is that over the years, discoms have augmented electricity infrastructure. Between 2014 and 2019, discom BSES Rajdhani (BRPL) installed 1,587 transformers in areas under its jurisdiction, while the same was only 1,198 between 2009-2014,” an official said.

Similarly, BSES Yamuna (BYPL) had 328 transformers between 2009 and 2014 in its areas and the number increased to 730 in the last five years.

“Another reason is that since 2014, Delhi discoms are scheduling power on their own which has helped in significant reduction in power purchase cost. Earlier this was done by the state-owned load dispatch centre,” said an official in the power department.