After all that hullabaloo over power discoms allegedly ripping off consumers in Delhi, as former chief minister Arvind Kejriwal never tired of asserting, the tariffs could actually go up. And this will happen over several years. Delhi Electricity Regulatory Commission (DERC) has proposed a repayment schedule for dealing with a Rs 8,000 crore revenue gap claimed by discoms that may be payable by hiking tariffs. It has also added that a tariff hike may not be necessary, but keep your fingers crossed.
Delhi's power discoms, which have been fighting for "cost-reflective" tariffs, were vindicated after DERC sent a communication to all three power companies, acknowledging the need for liquidation of the accumulated revenue gap according to the directions of the Appellate Tribunal of Electricity (ATE).
Till financial year 2011-12, the provisional revenue gap approved by DERC is Rs 5,206 crore for BRPL, Rs 2,855 crore for BYPL and Rs 3,371 crore for Tata Power which may or may not vary according to the findings of the ongoing CAG audit. To liquidize this revenue gap, DERC has announced eight annual installments to cover the deficit, which according to industry sources might translate into a tariff hike every year.
DERC officials, however, say that covering of the revenue gap might not necessarily lead to tariff hikes. "This is only our initial assessment. In 2013-14, the discoms were in a surplus of Rs 913 crore and we expect them to have a surplus in 2014-15 too. This, along with the 8% surcharge that has already been granted to them for the past two years, could be sufficient to meet the Rs 8000-crore deficit. Additionally, they are being compensated for their power purchase cost, which is the biggest chunk of their expenses, every quarter. Also, discoms have not asked for any tariff hike this time,'' reasoned chairperson P D Sudhakar.
The discoms are happy that the revenue gap is finally being addressed. They say that this will enable them to get better credit ratings and even bank loans.
While the regulator cautioned that the revenue gap could be revised after conclusion of the CAG audit, it added that a view has been taken that of the total revenue gap of Rs 11,431 crore, a liquidation schedule for Rs 8000 crore with a repayment schedule of the next eight years has been proposed. The carrying cost (interest) on the revenue gap is also being considered according to the provisionally approved carrying cost which ranges from 12%-13.5% for all three discoms.
According to the DERC notice, liquidation of a revenue gap of Rs 1998 crore for BYPL, Rs 3463 crore for BRPL and Rs 2359 crore for Tata Power Delhi will happen in eight equal instalments to avoid any kind of tariff burden.
"The annual instalments allowed to be liquidated are Rs 424 crore for BYPL, Rs 769 crore for BRPL and Rs 478 crore for Tata Power over a period of eight years. The liquidation schedule shall be applicable with effect from the new tariff order for 2014-15 and will be subject to the final outcome of the ATE order as well as impact of the outcome of the CAG audit,'' said DERC officials.