Tribunal favours discom's appeal, tariffs may rise

Delhi's power consumers may have just moved an inch closer to a hike in tariff. The latest judgement by an electricity tribunal has favoured the BSES discoms' appeal, seeking higher power purchase costs.

Delhi's power consumers may have just moved an inch closer to a hike in tariff. The latest judgement by an electricity tribunal has favoured the BSES discoms' appeal, seeking higher power purchase costs.

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The two-year-long battle had been fought at the Appellate Tribunal of Electricity (ATE) between DERC and BSES over the issue of discoms having surplus power and whether they had shelled out huge sums to source power.

This order will make the two BSES discoms eligible to recover around R2,000 crore extra as true up. The trued up amount is recovered through tariffs usually over a four-year period.

In its judgment two weeks ago, the ATE had pulled no punches in saying that the then DERC had made wrong assumptions about new power plants becoming operational in 2009-10 and had thrown up a misleading figure of future surplus power to discoms.

The discoms had appealed against these assumptions and such like on 13 counts. The tribunal found merit in 11 of them. The judgement now directs DERC to not only true up the amount but also be "more realistic in future projections". The ATE also found that the DERC had just made verbal inquiries about the commissioning of power plants.

"We direct the State Commission to true up the power purchase cost of the appellants at the earliest and in future, be realistic in its assessment of power purchase quantum from new generating units, based on authentic information on commercial operation date expected and not on the basis of the expected date of synchronisation," ATE said.

The ATE has also asked the DERC to reconsider the rate of carrying cost at the prevalent market rate, keeping in view the prevailing prime lending rate. ""The state commission is expected to make a realistic assessment... Any large deviation due to incorrect assessment as made in this case is going to create a revenue gap, and may result in cash flow problems for the distribution company," it said.