Delhi discoms demand 20% hike in power tariff

NEW DELHI: Citing a severe fund crunch, the power distribution companies in the Capital have sought a hike of up to 20% in power tariffs from power regulator, Delhi Electricity Regulatory Commission (DERC).

Currently, the DERC is in the process of reviewing the tariff for 2015-16 and has hinted that it may go up notwithstanding the AAP government’s firm position against any increase.

Sources said the three power distribution companies have sought up to 20% hike in tariff to meet rising power procurement costs.

While Tata Power Delhi Distribution Ltd has sought around 20% increase in tariff, the BSES Yamuna Power Ltd (BYPL) and BSES Rajdhani Power Ltd (BRPL) have demanded a hike of 19% and 16% respectively.

DERC, a quasi-judicial body, is likely to announce revised power rates next month after taking views of all stakeholders including resident welfare associations and discoms.

The AAP government had asked DERC to explain a series of hikes it effected in the last couple of years and indicated to it not to hike the tariff again till the Comptroller and Auditor General completed audit of the discoms.

However, DERC refused to follow the government’s diktat and decided to go ahead with the tariff determination process, arguing that the commission was “totally independent” to review rates.

The discoms have already conveyed to the DERC that “absence of cost reflective tariff and denial of Power Purchase Adjustment Cost (PPAC) for the last few months have depleted their financial positions”. The PPAC, which was introduced four years ago to help discoms adjust their power purchase cost, was discontinued by the regulator five months ago.

As per DERC figures, the two BSES discoms have a revenue gap of around `10,000 crore between 2009-2013.

According to power experts, cost of buying power by Delhi discoms has increased by around 300% since 2002 though the retail tariff has risen by only around 90% which has put strain on finances of the discoms.

Officials in power department said the three discoms had put the revenue gap till current year to around `27,000 crore.

The cost of buying power has increased primarily on account of an increase in the input prices of raw material like coal and gas, officials said. In its first stint, the AAP government had ordered a CAG audit of all the discoms, claiming that they had been misleading the government and the DERC about their finances.