DERC directed to assess power purchase costs

Delhi’s three power distribution companies have got a boost, with the Appellate Tribunal for Electricity (ATE) directing Delhi Electricity Regulatory Commission (DERC) to make a realistic assessment of their power purchase cost as soon as possible.

BSES Yamuna, one of the three Delhi discoms, had petitioned the tribunal against the order on rates announced by DERC in May 2009. DERC is working on new rates for the Delhi region and the revision order is expected next month. There has been no rise in Delhi power rates since 2009.

There are three private power distribution companies in the Delhi region – North Delhi Power Ltd (a unit of Tata Power), BSES Rajdhani and BSES Yamuna (both of Reliance Infrastructure).

In an order dated July 12, the ATE said it was not satisfied with the assessment of the DERC in this regard. It directed the latter to assess power purchase cost from new generating units based on authentic information on the expected date of commissioning and not on verbal enquiries from the generating stations.

Also, said ATE, the DERC had assumed a higher plant load factor (PLF) for new thermal units. Whereas, PLF for planning the availability of power for a year cannot be based on the performance of one or two selected plants for a few months. It should be based on consistent performance on an annual basis, the order said.

DERC chairman P D Sudhakar told Business Standard, “We are examining the tribunal order…whatever action will be required, we will take it…if we feel we can challenge the order in the Supreme Court, we will do after a detailed study.”

Delhi apart, the country has seen no substantial rise in power rates for the past five to six years and the accumulated losses of distribution companies have risen to Rs 75,000 crore.

This figure has almost doubled in the past four years. By the current trends, the projected losses of the discoms are estimated to reach Rs 1.16 lakh crore by 2014-15, according to power ministry estimates.

The tribunal order also mentions the interest rate on carrying cost, an issue in its judgment of June 30, 2010, in the case titled North Delhi Power Ltd versus DERC. Accordingly, it has told DERC to reconsider the rate of carrying cost, keeping in view the prevailing prime lending rate of banks.