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Home News Power Sector News DERC says govt. directive void - Tariff likely to be lowered

DERC says govt. directive void - Tariff likely to be lowered

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DERCThe Delhi Electricity Regulatory Commission (DERC) conveyed its statutory advice to the Delhi government on 01-07-2010, saying its directive to the commission to stall the tariff order on May 4 was `void' and that discoms have ``lied completely'' to the government about their financial status. Sources indicated that with discoms overcharging consumers to the tune of about Rs 300 crore per month, the tariff is likely to come down.

Three commission members, including the chairman, have unanimously stated that ``...discoms have lied completely in giving incorrect financial ratios in their representations to (the government of Delhi). If such incorrect statements would have been made by them in the Tariff Petitions before the Commission, they would have been liable to be prosecuted. The position of NDPL is so excellent that it can be compared to any other financially strong company.''

Sources said that the three discoms would in fact have a surplus of Rs 3,577 crore after meeting all their expenses and taking into account all returns on capital. Discoms were selling the surplus power available in the city and would be able to earn a profit of about Rs 2-3 per unit. ``Because of generation from new plants like Jhajjar, Bawana, Maithon and Mejia towards the second half of the year, the city actually had additional power which the discoms were selling for an additional profit. In the coming year, this power would be available all through the year indicating an even higher profit for the discoms, about 7,000 crore,'' said a senior official.

Even for power procurement, the commission has reportedly sanctioned much more to the discoms than they have asked for.

``In the case of BRPL and BYPL per unit cost of new generating stations demanded in the Petitions was Rs 2.32 against which the Commission has allowed Rs 3.17. Similarly, in the case of existing Central Sector Generating Stations the approved per unit cost is Rs 2.91 against Rs 2.67 to Rs 2.76 claimed by the discoms, showing that the Commission has been quite liberal in allowing the expenses likely to be incurred,'' says the advice.

The tariff order was to have been announced latest by May 5, 120 days after the discoms last petitioned the commission, according to the Electricity Act. However, after a representation by the discoms to the government, it sent a directive to the commission on the evening of May 4, asking it to stall the order. The commission then consulted the solicitor general on the issue who said that direction ``issued to a quasi-judicial authority that place a fetter on how that authority is to be exercised would be ultra vires and therefore void.''

Based on this, the commission can ``proceed to issue tariff orders'' after responding satisfactorily to the directive issued by the state government.

Source- Times of India


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