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Home News Power Sector News Delhi Power discoms want 60% hike in tariff

Delhi Power discoms want 60% hike in tariff

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DelhiThe Anil Dhirubhai Ambani Group (ADAG)-run BSES Yamuna and BSES Rajdhani, Delhi's power suppliers, threatened on 04-05-2011 to cut supply in the capital, if rates were not increased by 60 per cent, or BSES not given aid of Rs 500 crore. In the national capital, where sadak, bijlee and paani have been poll planks in many an election, it caused a flutter in the ruling and the opposition parties. Caught off-guard and under attack from opposition, power minister Haroon Yusuf summoned BSES officials for a meeting, and responded, saying "all options were open" for the government, if BSES Yamuna and BSES Rajdhani issued any further threats.

With the torrid summer days around, the timing of the ultimatum and the pressure is not lost on anyone.

Sources said sparks flew at the closed-door meeting. The power distributors demanded rates of domestic supply be hiked from the present Rs 2.45, to Rs 4.60 per unit. These rates would be applicable for first consumption slab of 0-200 units per month. As of now, residents of Delhi pay Rs 2.45 per unit up to 200 units, Rs 3.95 for 201-400 units and Rs 4.65 above 400 units.

Thanks to power tariff remaining constant for the past five years, the power regulator not truing up large parts of their capital investments and - as per discoms' statistics - the power purchase cost escalating around 196% in eight years, the companies claim that their accrued losses have created a revenue shortfall of around Rs 9,000 crore, making the utilities unviable.

"No bank is willing to lend us anymore. We have already defaulted on payment to banks. Now we are on the verge of shutting shop if our demands are not met," Lalit Jalan, chief executive office of Anil Ambani-led Reliance Infra, which controls the BSES discoms, said on Wednesday.

"We are losing Rs 5 crore every day, thanks to the tariff not being revised."

The discoms have also demanded an unprecedented "true-up note" from the Delhi Electricity Regulatory Commission (DERC). The note would as good as guarantee in writing that the DERC would true up Rs 9,000 crore of "regulatory assets. The banks, discoms have argued, would give loans based on this note.

According to a "solution" offered by the companies to tide over the immediate crisis, they should be allowed to levy a variable fuel adjustment cost on power consumers.

This is the cost of the fuel needed to generate power - something power-generating stations charge the discoms on a monthly basis.

"As many as 17 states have this. This is part of uncontrollable costs of tariff. Power purchase cost alone constitutes 80% of the tariff," Jalan said.

Sources said the DERC is finalising the process of allowing this variable surcharge to be levied, and that typically it could be upwards of 20% of the power tariff. But officials said getting a true-up note from the regulator and Rs 500-crore bailout money from the government was as good as impossible since they are unprecedented and out-of-turn demands.

The discom's supposedly precarious cash-reserve and the advent of the variable fuel adjustment cost in Delhi were first reported in the Hindustan Times last year.
he opposition cried hoarse and said tariff should be reduced since the Delhi Electricity Regulatory Commission (DERC) had proposed a reduction in traffic some months ago. Senior BJP leader and MLA Jagdish Mukhi said, "DERC has already asked electricity rates to be slashed by 20 per cent. How can BSES talk about increasing rates when they are already getting Rs 300 crore extra from not reducing rates. They are fooling the public and cooking up books to show losses. When privatisation took place, the CAG had said there was a Rs 12,500 crore scam and Delhi government was to blame. Now the same government is hand and glove with private players to raise the rates. The electricity companies are getting an assured return by way of 16 per cent profit. How can they claim to be in loss." Mukhi questioned why ADAG companies want to increase rates, when Tata-run NDPL has no such issue. He said government-appointed directors on board BSES units had failed to perform their duties.

Delhi BJP chief Vijender Gupta has another view. With losses due to transmission and distribution (T&D) and theft down to 12 per cent from 53 per cent, he says, the distributors are making a neat profit of Rs 120 crore on each per cent of loss recovered.

By these accounts, they make Rs 4,900 crore in profits every year. It seems Delhi's power brokers are hell bent on taking the citizens for a ride. Is there anything new there?


Source- Hindustan Times


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