Covid-19: Delhi extends subsidy on electricity, to pay for discoms' dues

Delhi on Tuesday said it will continue a subsidy offered on electricity for the current fiscal year as well. It also announced that it will pay 50 per cent of the subsidy amount for this quarter to the power distribution companies (discoms) to improve the cash flow.

In a notice issued under the Section 65 of the Electricity Act, the Delhi government said it will pay 50 per cent of the subsidy amount for this quarter directly. The other half will be paid to the two state-owned power generating companies and the transmission company, Delhi Transco Limited, to settle the dues of the discoms to them. 

Delhi government pays subsidy amount to discoms annually and their dues are adjusted against the state's payment. This has been done in view of the coronavirus epidemic impacting the revenue and cash flow of discoms as they are unable to bill and collect dues from consumers. 

"Due to outbreak of Covid-19 in NCT of Delhi, the cash flow of discoms is temporarily impacted. Accordingly, department shall release 50 per cent of the first quarter of subsidy directly to discoms and remaining will be credited to account of IPGCL, PPCL and DTL to the extent of outstanding dues of discoms to these companies. The situation shall be reviewed by the department of power in subsequent quarters and accordingly it will take action on adjustment of amount of subsidy," said the notice.  

The Delhi government also said it has approved "extension of existing electricity subsidy to domestic and agriculture, special subsidy to 1984 Sikh riots victims and lawyers chambers without premises of court complex in NCT of Delhi for financial year 2020-21."

Electricity rates in Delhi have witnessed three consecutive reductions in energy charges by 50 per cent every year during 2015-2018. In 2018-19, the energy charges were halved for 0-200 and 200-400 units to Rs 2 per unit and Rs 100 fixed bill for 0-100 units. One unit is one kilowatt hour load run for one hour.

During the last fiscal, the Delhi Electricity Regulatory Commission (DERC) approved a new model of subsidy over and above the existing scheme of subsidy. 

Under it, the fixed charge in the bills of consumers was cut by more than half in July. Fixed charges up to 2 kilowatts (kW) was decreased to Rs 20 from Rs 125. For 2 kW-5 kW bracket it was reduced to Rs 50 from Rs 140. The fixed charges for 5 kW-15 kW was reduced to Rs 100 from Rs 175. The DERC also gave 100 per cent subsidy to 0-200 units consumption bracket.

An electricity bill comes with two components, - a fixed charge which remains same every month and energy charge which is calculated as per consumption.