The tussle between the Anil Ambani-controlled companies that distribute power in Delhi and the Arvind Kejriwal-led state government appears to be intensifying. BSES Yamuna Power and BSES Rajdhani Power told the state government that its allegations that the companies didn't pass on benefits from improved efficiencies to consumers were "misleading and baseless".
After being questioned on audit issues, unscheduled outages and "fast" meters, Reliance discoms BSES Yamuna and BSES Rajdhani have written to the Arvind Kejriwal-led government, denying allegations that the power utilities had not passed the benefit of reduced aggregate, technical and commercial (AT&C) losses on to consumers. The BSES discoms say the increase in power purchase costs (by more than 300%) over the past 10 years has cancelled out the benefits of AT&C loss reduction, creating a deficit of over Rs 8,000 crore.
During privatization in July 2002, the AT&C loss levels of BRPL and BYPL were 57%. These have been brought down to 18% by financial year (FY) 2013; the figures have been reported to DERC. The discoms claim an additional Rs 19,258 crore has been generated as revenue in the last 10 years. "However, during the same period, the bulk power purchase of the three discoms from central power sector undertakings (IPGCL, DTL, etc) has increased by 300%, that is, from Rs 1.42 per unit in FY 2004 to Rs 5.43 unit in FY 2013 on average. This has led to a net increase of Rs 27,404 crore in the power purchase cost during the 10 years," said a letter by BRPL CEO Gopal Saxena and BYPL CEO Arvind Gujral to the government.
The letter adds: "As can be seen in the last 10-year period, the gains from AT&C loss reduction were Rs 19,258 crore, whereas the additional cost of bulk power, which constitutes 85% of the cost component of tariff, was Rs 27,404 crore, leaving the BSES discoms with a deficit of Rs 8,146 crore before the operating expenses." The letter points out that the BSES discoms were sourcing power from central public sector undertakings ( NTPC, NHPC, etc) and state undertakings (DTL, PGCL, etc) under long-term power purchase agreements whose "tariffs were approved by appropriate regulatory commissions like CERC or DERC".
"It is unfortunate that instead of recognizing the substantial contribution of BSES discoms, misleading and baseless allegations are being made and the real reasons for power tariff increase are not being addressed," the letter further says.
The BSES discoms say their survival is at stake after the Delhi government announced a slew of measures to tackle power issues. These include a drive to test meters, daily list of scheduled outages with explanations for unplanned power cuts, and an audit of all their financial accounts since privatization. The discoms are yet to appoint a nodal officer for the CAG audit in keeping with a letter by the Delhi government. They have sought a number of clarifications from the government on the audit that is scheduled to start within the month. The Kejriwal government is counting heavily on the audit throwing up some bungling in the discoms' accounts so that power tariff can be reduced without the subsidy announced by the CM earlier this month.