Demand for audit of private power discoms grows

This, after Congress MP Sanjay Nirupam had his way in Maharashtra with a four-day fast

The demand for independent audits of private power distribution companies is gaining traction, with Congress Member of Parliament Sanjay Nirupam breaking his four-day fast in Mumbai, after Maharashtra Chief Minister Prithviraj Chavan promised to consider his demands.

Apart from a cut in power rates in Mumbai, Nirupam is seeking an independent audit of the private power discoms. Reliance Infrastructure and Tata Power supply power to the bulk of consumers in Mumbai.

On Saturday, Nirupam, general secretary of the All India Congress Committee, had threatened to immolate himself if his demand for a cut in power rates wasn’t met and the state government didn’t order an audit of discom accounts.

Mumbai was excluded from the state government’s recent decision of a subsidy-backed 20 per cent cut in power rates to domestic and industrial consumers, apart from power looms, by the state-owned Maharashtra State Electricity Distribution Company. The decision was applicable on consumers with a power load of less than 300 units a month.

The demand for auditing discom accounts rests on the assumption that the process will expose hidden gains and create grounds for a rate cut. Mumbai discoms are contesting the charge, with Reliance Infrastructure writing to Nirupam, saying deciding power rates was the prerogative of the Maharashtra Electricity Regulatory Commission, while it was up to the state government to provide subsidy.

In Delhi, the Union Comptroller and Auditor General (CAG) has initiated an inspection of the city’s three private distribution companies owned by Reliance Infra and Tata Power. While hearing a case filed by Aam Aadmi Party member Prashant Bhushan last week, the Delhi high court here declined to impose a stay on the government’s order for a CAG audit. The court asked discoms to cooperate, adding CAG shouldn’t give a report until the court concluded its hearing. The case will come up for hearing on February 9.

Delhi’s three private power distribution companies had last week filed a writ petition in the Delhi High Court challenging the government’s move to have a CAG. The audit has no legal sanctity, Reliance Infrastructure-owned BSES Yamuna and BSES Rajdhani and Tata Power subsidiary Tata Power Delhi Distribution Ltd (TPDDL) said. “Section 20 of the CAG Act under which the present audit is sought to be done does not empower the CAG to conduct audit of private companies,” BSES said in a statement, adding the section only talks of “Bodies and Authorities” other than those incorporated “under any law made by Parliament.”

Reliance Infrastructure holds 51 per cent stake in BSES Rajdhani and BSES Yamuna which cater to 75 per cent of the city’s 3.4 million consumers. Tata Power holds 51 per cent in Tata Power Delhi Distribution Ltd (TPDDL) which caters to the rest. The Delhi government holds the balance 49 per cent in each of the three companies through its holding company Delhi Power Company Ltd (DPCL).

The discoms are incorporated under the Companies Act 1956 and are granted a distribution license by Delhi Electricity Regulatory Commission (DERC). The firms say they welcome an independent audit but within the purview of the law.