Delhi govt urges regulator to roll back power tariff hike

Plea also to penalise distribution firms for power cuts

The Aam Aadmi Party (AAP) government in Delhi has urged the regulatory body to penalise power distribution companies for indeterminate power cuts and roll back the recently announced tariff increase.

AAP was voted to power earlier this year on promises of cheaper power and water. On Saturday, however, the Delhi Electricity Regulatory Commission (DERC) increased the power tariff, on the surcharge component.

This provided the Opposition an opportunity to lash out at the AAP government, with Delhi Pradesh Congress Committee Chief Ajay Maken saying the ruling party had forgotten the people.

“It is unfortunate that this government came to power on the promise of reducing power tariff by half. Now, we have a six per cent hike. Next month, when the commission will decide on the annual revenue requirement of these private companies, there will be another 20 per cent hike.”

Within days of coming to power, the AAP government had slashed power tariff rates by half. The government has also asked DERC to roll back the power tariff increase. Since coming to power with a massive mandate, the government has tried to keep the electricity distribution companies disciplined and has, therefore, asked the regulatory commission to impose daily penalties instead of monthly ones.  A DERC official, who did not want to be named, said the regulator was considering it.

The government had also ordered a Comptroller and Auditor General of India probe into the distribution companies, and Power Minister Satyendra Jain said there could be no increase in power price till the CAG report was submitted.

Officials in the power department, however, said a rollback of power tariff was unfeasible.

 The increase was supposed to have been implemented in November itself and if these are rolled back the distribution companies would run into untenable losses.

In November last year, ahead of Assembly elections, the DERC rolled back its tariff hike in less than 24 hours, after which Tata Power Delhi Distribution Limited (TPDDL) had filed a case against the regulator.

The hike was warranted because of increase in Power Purchase Adjustment Cost (PPAC) — a surcharge given to compensate the distribution companies for variations in the market-driven fuel costs (additional costs on account of increase in coal and gas prices).

The three discoms — TPDDL, BRPL and BYPL — had requested a hike of 7.42 per cent, 7.26 per cent and 17.01 per cent, respectively, last year.

The current average rate of electricity in Delhi is Rs 2.8 per unit while the power purchase cost has gone up to Rs 5 per unit. The combined financial loss of Delhi’s three power distribution companies was Rs 22,000 crore in 2012-13 while the government provided a subsidy of Rs 118 crore.