Delhiites are in for a major relief as power tariffs in the city are not going to be increased this year.
Interestingly, it took four steep annual power tariff hikes, and “coincidentally” a five-month-old Aam Aadmi Party government for the Delhi Electricity Regulatory Commission (DERC) to finally conclude that the annual revenue requirement cited by the distribution companies was “inflated”.
The power regulator in its preliminary assessment has observed that the four discoms in the Capital will actually have a “minimal” revenue deficit at the existing tariffs.
The discoms in their petitions had claimed a total revenue gap of Rs. 3,737 crore for the financial year, 2015-16, whereas the power regulator in its assessment has approved only Rs. 588 crore.
However, a final decision will only be taken after the full process is over for which a public hearing will be held on August 4 and 5.
“So far, we do not see any need to increase the rates of electricity in Delhi for this year. Power tariffs have been increased every year since 2011, which has now reduced the revenue gap to a great extent,” DERC chairman P D Sudhakar told The Hindu
When asked about the AAP government’s influence, he said, “Not at all. It’s a mere coincidence.” The four discoms - BSES Yamuna (BYPL), BSES Rajdhani, (BYPL), Tata Power (TPDDL), and New Delhi Municipal Council (NDMC) - had sought a hike of up to 20 per cent in tariffs this year.
Capital expenditure
To further lower this deficit, it is also planning to make adjustments on the capital expenditure cited by the power utilities and levy penalties for not achieving targets like procurement of electricity through non-renewable energy.
“The deficit in revenue requirement can go down further as we are also conducting an audit of the discoms’ capital expenditure. Then there is additional revenue generated through the Time of Day (TOD) tariffs. In order to liquidate the past regulatory assets, which run up to around Rs. 20,000 crore, a surcharge of eight per cent has already been in place since 2012,” said Mr. Sudhakar.
It is pertinent to note that the AAP government has been insisting that the power regulator do not increase the tariffs until the CAG report on the audit of discoms is out.
The DERC, of late, has been under immense pressure from Chief Minister Arvind Kejriwal and his cabinet, who have repeatedly attacked the regulator for “favouring” the discoms.
However, a final decision will only
be taken after the
full process is over
for which a public hearing will be held on August 4 and 5
