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Home News Power Sector News Delhi - DERC rejects demand for tariff hike

Delhi - DERC rejects demand for tariff hike

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DERCHardening its position in the ongoing face off over the power tariff dispute, Delhi's power regulator DERC has shot off letters to all three private discoms rejecting point-by-point all their arguments demanding an increasing in the rates. The Delhi Electricity Regulatory Commission also sent a letter to the government, believed to be sympathetic to the demands by the discoms, strongly objecting to any hike in tariff.

The letters to discoms as well as to the government from the DERC came days after a top official in the Chief Minister's office said genuine demands of the discoms must be addressed by the regulator while finalising the new electricity rates.

In its letter to Tata-backed discom NDPL, the DERC said the company made a profit of Rs 468.82 crore in 2009-10 which increased from 169.60 crore in 2004-05, an increase of 176 per cent.

The regulator also charged NDPL of giving "figures without any basis" in its representation to the government demanding a hike while "ignoring the fact that the audited accounts for 2009-10 showed a cash profit of Rs 468.82 crores.

Also rejecting the discom's contention that banks have refused to lend money to the company for its poor financial position, DERC said credit rating agency ICRA has given NDPL high credit quality rating for its healthy financial position.

"The positive credit profile also favourably factors in the stable demand growth and low level of business risks in its core operations' and its improving financial risk profile," it said.

Exercising a special power under Delhi Electricity Act, the city government after receiving a representation from the discoms had on May 4 -- a day before the scheduled announcement of the tariff order -- directed DERC not to announce it till the regulator got the go-ahead from it.

The DERC after receiving the government directive had indicated that it had planned to cut down the tariff by 20 to 25 per cent as discoms would have a surplus of around Rs 4,000 crore if the existing tariff was not tinkered with.

In its letter to BSES Yamuna Power Ltd, DERC said the company made "highest cash profit of Rs 157.33 Crore in 2009-10 which increased from 16.89 Crore in 2007-08".

The DERC also accused BYPL of misrepresenting facts not giving proper figures in its representation to Delhi Government seeking hike in tariff.

"Despite good financial position of your company and fairly good credit rating, you have chosen to say, in your representation, that your net worth is negative," DERC said in the letter.

A similar letter was sent to BSES Rajdhani Power Ltd also by the DERC.

Source- Economic Times
 

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