Take over sale of surplus power, BSES discoms tell Delhi govt

Reliance Infrastructure-owned power distribution companies (discoms) in Delhi have asked the state government to take over the management of surplus power available for sale. The move comes against the backdrop of allegation that the firms are buying excess power and selling it at lower price, thereby booking huge losses and resulting in an unwarranted rate burden on consumers.

Former Chairman of Delhi Electricity Regulatory Commission (DERC) Berjinder Singh had alleged that the discoms could earn an annual profit of Rs 3,577 crore through sales of surplus power in off-peak hours. The calculation was based on a spot market price of Rs 5.75 a unit.

Singh's argument is now being used by Chief Minister Arvind Kejriwal to allege financial irregularities. BSES Rajdhani and BSES Yamuna said in a January 15 letter to the Delhi government, "The sale price of Rs 5.75 a unit assumed to arrive at a fictitious yearly profit of Rs 3,577 crore has no basis."

The discoms said that in the interests of transparency and to avoid unnecessary controversy, they request the government to "take over the entire responsibility for ensuring adequate power to meet the peak demand and to sell the resulting surplus off-peak power in the most optimal manner at the alleged rate of Rs 5.75 a unit, or for that matter, at any rate above the presently realised sale price".

The companies also said the benefits of such higher realisation will also be passed on to consumers. Based on the forecasts of demand and availability, around 200 million units of surplus electricity with a power purchase value of Rs 90 crore is likely to be available in the current quarter in Delhi. The surplus would stand at 1,500 MUs with a value of Rs 600 crore for the next financial year ending March 2015.

Discoms procure power under long-term pacts with central and state generating companies. The discoms say they are not responsible for the terms and conditions or pricing of power in such agreements as they were executed by the erstwhile Delhi Vidyut Board and assigned to BSES by DERC in 2007. The discoms currently sell off-peak short-term surplus power through power exchanges, power banking, unscheduled interchange or trading licencees, according to DERC guidelines.

Earlier this month, Delhi Lieutenant Governor Najeeb Jung had asked the Comptroller and Auditor General of India for an audit of the discoms' accounts. The audit, due to begin shortly, would expose the financial irregularities and create grounds for a tariff cut, according to Kejriwal.