Reliance discoms blame Delhi power regulator for financial woes

Reliance-owneds discom BSES Rajdhani and Yamuna Thursday blamed the Delhi Electricity Regulatory Commission (DERC) for their precarious financial condition, contending the panel had failed in discharging its statutory obligation of fixing a cost-reflective tariff for power supplied to consumers in the national capital.

"If DERC acts under section 62 of the Electricity Act, 2003 (providing for the determination of tariff) that is contrary to Section 61 (Tariff Regulation) then he (Regulator) is acting without jurisdiction," senior counsel P.Chidambram told the apex court bench of Justice J. Chelameswar and Justice R. K. Agrawal as the court reserved its verdict on a batch of cross petitions by discoms and the DERC.

Contending that DERC has "hopelessly failed to perform its statutory duties" under the Electricity Act, Chidambram, appearing for BSES Yamuna, said that since 2013, the power purchase cost by the disoms have always exceeded the revenues.

In his rejoinder arguments, Chidambram told the court to direct DERC to pay the outstanding dues and Reliance discoms will clear all the debts of the power generating and transmission companies.

Assailing the disregard of the mandate of the section 62 by the DERC while fixing the tariff, senior counsel Kapil Sibal, appearing for the BSES Rajdhani, told the court that law says that the firm should get 16 percent return on its equity, but there are negative returns on the investment.

He contended that if the finances of the Reliance discoms are not in good shape, then the blame rests with the DERC which has failed to discharge its statutory jurisdiction of fixing a cost reflective tariff.

Meeting the DERC submission that Reliance discoms's entire case of unviable tariff and consequent ever-mounting outstandings was edificed on fudged costs, Sibal said that this was an allegation that has never been made in the past.

"Have they ever said that we have fudged our costs. Is it there in any order..," Sibal said, telling the court that in the management of the discoms, there were four senior bureaucrats of the Delhi government that included the chief secretary, and the finance and power secretaries and no one has ever said so.

Urging the court to lay down the law on what the duties of an electricity regulator are and how the tariff should be determined, Sibal sought to brush aside DERC's submission that while Reliance discoms had all the problem on account tariff but on the same tariff, the Tatas were at peace and were smoothly running their supply of power.

Tata too have outstanding dues of Rs.5,489 crores, Sibal said pointing out that Tata in terms of its consumer base - which has a bigger component of commercial consumers paying more tariff for same electricity - was in an advantageous position.