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Home News Power Sector News DERC suggests bailout packages for private discoms

DERC suggests bailout packages for private discoms

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DERCIn a 'statutory advice' issued to the Delhi government on February 1, Delhi Electricity Regulatory Commission (DERC) has suggested 'bailout packages' for private distribution companies in Delhi. The regulator suggested that the Delhi government should take up the issue of extending schemes such as the Accelerated Power Development and Reform Programme (APDRP) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to Delhi.

Delhi Power Secretary Shakti Sinha said that revenue details are being worked out based on the advice by the regulatory commission. "Our officials are working on the recommendations to figure out the best way. It will take some time."

The three power distribution companies of Delhi — Anil Ambani-owned BRPL and BYPL and the Tata-owned Tata Power — want a further hike in power tariffs to recover their "past dues" and "to have adequate finances to be able to purchase power for the coming months. With collective regulatory assets worth over Rs 20,000 crore, the discoms have declared that they may not be in a position to continue distributing power unless an immediate and a substantial relief package is announced by the government.

The discoms have also informed the DERC that their poor financial state and credit rating has made it difficult for them to secure loans and to purchase power for the city.

DERC Chairperson P D Sudhakar said that the discoms have filed tariff petitions. "Everything has to be calculated to put little burden of tariff on the consumer. We have advised the Delhi government to tell the Centre about the need to extend the Centrally-sponsored schemes and restructuring packages so that the burden of increasing power costs and the aggregate technical and commercial losses does not go down to the consumer," Sudhakar said.

"Any financial support provided directly or indirectly by the Central or state government through any of their schemes has a direct impact on the Aggregate Revenue Requirements (ARRs) of the distribution entities and, therefore, on the electricity tariffs which are required to be charged from the electricity consumers," says the DERC's recommendation to the Delhi government.

The Commission has recommended that "Delhi government may take urgent steps so that the benefits of various Central government-sponsored schemes are extended to the Delhi distribution utilities". "Unless this is done, tariffs in Delhi could become unsustainable, especially when compared to other states, where state-owned utilities not only avail the benefits of the Centrally sponsored schemes but also avail direct subsidies from the state governments and additional budgetary support for lower tariff levels," the DERC has said.

The 'advisory' to the government points out that Delhi has lost out on the benefits of a financial bailout package introduced by the Centre for restructuring of state distribution entities. "The Delhi government may take up with the Ministry of Power to sanction the bail out package for the discoms. This would be the single most important measure for deferring the incidences of high levels of past revenue gaps on the tariff determination process," DERC said.

Source- Indian Express


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