With the post of Delhi Electricity Regulatory Commission’s (DERC) chairperson falling vacant, a host of decisions on the city’s power sector now hang in limbo. While government officials said that the process of appointing a new chief is likely to take at least two months, the situation is only going to worsen the financial crisis that distribution companies, as well as the Delhi government’s generation companies, have been facing.
The Lieutenant-Governor on Wednesday scrapped the Delhi government’s appointment of Krishna Saini as chairperson of DERC, which has made it certain that no power tariff revision is going to happen in the Capital for the second consecutive year.
Mr. Saini had one of the shortest tenure as chairperson of the power regulator after he was appointed on March 4 this year, succeeding P.D. Sudhakar.
Only one member, B.P. Singh, is now left in the three-member commission as a result of which its own plan of liquidating regulatory assets of discoms is headed nowhere.
Besides, all other directives issued by the government to the DERC under Section 108 of the Electricity Act are also not going to see the light of the day as they were done without the approval of the L-G. One such directive was offering compensation to consumers for unscheduled power cuts, which Mr. Saini had issued under the Delhi Electricity Supply Code and Performance Standards (Fourth Amendment) Regulations, 2016.
Financial problems
“What is making the situation worse is that every stakeholder in this sector — the Delhi government, the discoms and the State-run generation companies — owe money to each other,” said a government official.
BRPL and BYPL together owe around Rs.8,000 crore to three companies of the Delhi government — Delhi Transco Limited (DTL), IPGCL and PPCL. It also owes several thousand crores to State-run genco NTPC.
At the same time, due to non-recovery of dues from the discoms, the Delhi government’s companies claim they too are unable to make timely payments to NTPC.
In March 2014, the power regulator had worked out a detailed plan of amortising accumulated regulatory assets or past costs incurred by discoms under which it allowed the city’s three private discoms to recover dues totalling Rs.8,000 crore over eight years beginning 2014-15.
As part of this plan, the discoms had to recover Rs.1,671 crore of RAs from consumers through tariff in the first year. Following this plan, the regulator in September last year had announced that the assets had already reduced by about Rs.2,000 crore.
Liquidation process
However, this year, neither are the tariffs going to be revised nor are the mandatory quarterly Power Purchase Adjustment Costs (PPACs) going to be levied on electricity bills, as a result of which the liquidation process has been put on the back-burner.
The discoms claim that their revenue gap on a standalone basis for the financial year 2016-17 of the BSES discoms (BRPL and BYPL) is around Rs.1,500 crore, whereas for Tata Power (TPDDL) it is around Rs. 700 cr.
Records with the DERC revealed that until March 2014, the three discoms had approved regulatory assets worth Rs.12,000 crore.
Saini had one of the shortest tenure as chairperson of DERC after being appointed on March 4 this year
