Power tariff: No reduction, no increase in rates

Delhi Government has denied that it plans to hike power tariff. At the same time, it appears that it is not willing to allow the existing rate to be reduced either. Harish V Nair reports.

Delhi Government has denied that it plans to hike power tariff. At the same time, it appears that it is not willing to allow the existing rate to be reduced either.

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The row over fixing of new tariff took a twist with the government slamming DERC's decision-making ways citing "serious differences" between its chairman and members.

The government also denied having scuttled DERC's proposal to reduce tariff which had come on the grounds that the discoms had made huge profits. But the government said it was waited a recommendation as it considered the proposal was just the chairman's opinion without the mandatory backing of members.

A PIL had accused the government of succumbing to pressure from the discoms and prohibiting the release of new tariff "approved by DERC" on April 29, 2010, which, the PIL claimed, would have been lesser than the present rate.

Government counsel Najmi Waziri's affidavit said "as per communications from DERC chairman and members, there seemed to be differences of opinion between them. A decision had to be endorsed by the chairman and at least two members. That never happened".

He said there was reason to believe that DERC was not adhering to the national tariff policy as per which "uncontrollable costs", such as the rate at which power was bought at peak season from other states, needed to considered. "It can have serious consequences on the supply and distribution in Delhi", he said.

The government says there is a limit to subsidies. As per the policy, "uncontrollable costs should be recovered to ensure that future consumers are not burdened with past costs. The costs include fuel costs, cost on account of inflation, taxes and import costs on account of adverse natural events".

A letter written by Secretary (Power) Delhi Government H.K. Ahuja to DERC on July 19, 2010, states: "it is clear that matter of statutory advice was not taken up in the DERC meeting and two other members have not endorsed the chairman's advice. So advice rendered by the chairperson may be treated as his personal advice and not that of the commission"

The government had on May 4 sought a "statutory advice" from DERC on the claims of the three discoms, BSES Rajdhani, BSES Yamuna and NDPL, that their financial health was in decay. But DERC had later told the government the discoms were sitting on a combined cash profit of over Rs 300 crore per month. The DERC has also sought auditing of the discoms' accounts by the Comptroller and Auditor General of India.