DERC rolls back power tariff hike

The hike was to adjust the increased cost of power purchase by distribution companies

A day after it increased power tariff in Delhi, the Delhi Electricity Regulatory Commission (DERC) rolled back the same on Friday, citing review of technical details. The commission is re-looking at the tariff components, according to senior DERC officials.

"We have received some more details from the power generators, including NTPC, the major supplier regarding the cost of power and pass-through amount on distribution utilities. We would review the components of PPAC (power purchase adjustment cost)," said a DERC executive.

PPAC is a surcharge given to compensate the discoms for variations in the market-driven fuel costs (additional costs on account of increase in coal and gas prices).

The increase in tariff, announced on Thursday, was to adjust the increased cost of power purchase by the distribution companies.

The distribution utilities operating in Delhi - Tata Power Delhi Distribution Limited (TPDDL) and Reliance Power-owned BSES Yamuna Power Limited (BYPL) and BSES Rajdhani Power Limited (BRPL) - refused to comment on the development.

According to industry sources, the sudden withdrawal has been done keeping in mind the Delhi Assembly elections, which are slated to happen in January 2015.

The Aam Aadmi Party, which promised a 50 per cent cut in the power bills of Delhi citizens while in power, said, "The U-turn by DERC has proved it allowed its autonomy to be trampled by the BJP-led central government and the unresponsive Delhi administration with the sole intention of letting the private power distribution companies (discoms) to impose an unnecessary burden on the people."

The party also said electricity tariff structure in Delhi should not be touched till the account books of these discoms are thoroughly scrutinised by the Comptroller and Auditor General of India.

Delhi discoms buy 80-85 per cent of their electricity from central generating stations, which are governed by the CERC and are able to pass on the cost to the discoms. However, the discoms, which are governed by the state regulator - DERC in this case - are unable to do so.

Hence, TPDDL, BRPL and BYPL had requested an increase of 7.42 per cent, 7.26 per cent and 17.01 per cent, respectively. In its notification on Thursday, DERC approved a tariff hike on the total monthly bill - 4.5 per cent for BYPL, seven per cent for BRPL, and 2.5 per cent for TPDDL.