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Home News Power Sector News Delhi - power bill is up 22%, more hikes to follow

Delhi - power bill is up 22%, more hikes to follow

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DERCFrom September 1, Delhiites will have to pay much more for electricity. The Delhi Electricity Regulatory Commission (DERC) has finally ended all speculation and, after more than a year's wait, come out with a 21.77% hike in the power tariff in the Capital. The last tariff hike (6.6%) was in 2005-06.

That's not all. The next few years could also see the tariff increasing as the actual quantum of the hike is a whopping 80% but is being spread over the next few years to spare consumers the shock, said DERC chairman PD Sudhakar on Friday. The DERC has not taken a call on when the remaining portion of the hike will be recovered.

On top of this, as a double whammy, the DERC has also introduced the system of the Fuel Cost Adjustment mechanism, which is likely to put an additional surcharge on power bills every quarter. This is the variation in the fuel cost discoms pay to power producers over and above the cost of power.

The tariff hike has been arrived at after factoring in part of the past dues to discoms that they need to recover from consumers through tariff and their budget for supplying power next year.

In money terms, the 80% hike translates into around Rs6,000 crore that needs to be recovered from consumers by way of tariff increases in the coming years.

It is a blanket victory for the private power distribution companies -Reliance and Tata - which have been lobbying hard for at least a 50% hike, claiming mounting losses and escalating power purchase costs.

Justifying the hike, the DERC chairman said power could not remain insulated from the overall inflation in the country. Citing figures from the rising Wholesale Price Index and gas and coal prices, he said the quality of power supply in Delhi has improved a lot in the regime of private discoms.

In an attempt to defend power tariff hike, the current Delhi Electricity Regulatory Commission publicly denounced a decision taken by the previous panel headed by Berjinder Singh. It presented an analysis showing how the purported Rs 3,577-crore profit assumed in the controversial tariff order of the financial year 2010-11 had no standing and was based on assumptions which were never realized.

DERC under the chairmanship of P D Sudhakar and members Shyam Wadhera and J P Singh is trying to justify the almost 22% hike at a time when memories are still fresh about a 20% reduction that the last commission had proposed in 2010-11 before it was stopped by the state government. Activists say it's a double whammy for Delhiites who were not only denied a 20% reduction last year but are now being made to pay 22% more.

Much of the blame for discoms' revenue gap is put on the delay in commissioning new power plants. These plants were supposed to generate over 21,000 units of surplus energy, sale of which could have brought in a net worth of Rs 3,577 crore. BSES Rajdhani was then assumed to have a surplus of Rs 1,527 crore, BSES Yamuna Rs 1,027 crore and NDPL Rs 978 crore.
Before privatisation in 2002, the erstwhile Delhi Vidyut Board had passed on R1,000 crore of arrears of consumers to Delhi Power Company Limited (DPCL), the holding company of the state government.

When the DERC asked the DPCL to give that money to Delhi Transco as entitlement, it refused saying it was not bound by the regulator's orders, thereby creating a shortfall of R1000 crore for Transco.

"The ATE ordered that Transco be allowed to recover the amount, but the DERC decided to appeal to the Supreme Court, although its basis seems arbitrary," said a senior official on the condition of anonymity. "So most probably it will come back as a burden on Delhiites when DTC recovers it from discoms, which will pass it on to their consumers."

The other order, against whose appeal has not yet been admitted, is about a purchase of equipment worth R535 crore by BSES from its parent company Reliance Infra.

 

 

Source- Hindustan Times

 

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