Delhi residents are set to be the ultimate sufferers in the altercation between the Lieutenant Governor and the Chief Minister. With the two BSES power distribution companies failing to get a loan of Rs.11,000 crore from Power Finance Corporation (PFC), Delhiites are also losing on the rare chance of witnessing a potential reduction to the tune of around 13 paisa per unit in power tariffs.
Absence of a letter of comfort (LoC) from the Delhi government to the cash strapped BSES Yamuna Power Limited (BYPL) and the BSES Rajdhani Power Limited (BRPL), in the long term, is going to affect around 70 per cent of the power consumers in the city. As the primary reasons for power tariff hikes in Delhi are increasing power purchase cost and past costs, termed as “accumulated regulatory assets”, power experts opine that the loan would only help reduce the piling costs.
Out of the three discoms, the two BSES ones have the largest regulatory assets amounting to approximately Rs.20,000 crore. “There is an indirect relation between the loan and power tariffs. Taking loan from the PFC would be most beneficial for all stakeholders including consumers as their rate of interest is 1.5 to 2 per cent lower compared to what others charge. The discoms will save a sizeable amount of money through this which could help them be financially stable as they currently have huge arrears from previous years,” said Dr Pramod Deo, former chairperson, Central Electricity Regulatory Commission (CERC).
He added that financial stability of a discom would not only mean a slight reduction in tariffs, but also better supply of power across the city. The plight of the two discoms has worsened as the Aam Aadmi Party government is adjusting all its dues (Rs.6,000 crore) with the subsidy amount. “The BYPL owes Rs.4,500 crore to the State-owned Gencos and Transco while the BRPL has to pay Rs.1,500 crore to them. We plan to continue the subsidy until the CAG audit is completed by end of this year. So the amount recovered by the government till then would be roughly Rs.900 crore,” said a Delhi government official. With the loan, the discoms also claim they would be able to repay the remaining dues to the government.
Experts in the power industry suggest that on getting a loan from the PFC, the discoms could save approximately Rs.220 crore through lesser interests, which when converted comes around Rs.13 paisa per unit. Almost 90 per cent of power purchased by discoms in the Capital comes through long-term procurements, which amount between Rs.4.5 and Rs.5 per unit adding to the woes of the discoms and consumers alike.
Absence of a LoC from the Delhi government to the cash strapped BSES Yamuna Power Limited & the BSES Rajdhani Power Limited, in the long term, is going to affect around 70% of the power consumers in the city.
