The Hindu : DERC becoming a toothless tiger

Online edition of India's National Newspaper
Monday, Jun 09, 2003

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DERC becoming a toothless tiger

By Lalit K. Jha

NEW DELHI JUNE 8. Though the Delhi Assembly has given it overriding powers to protect the interest of the people in the post-privatisation era, the Delhi Electricity Regulatory Commission is marching -- albeit slowly -- towards becoming a toothless tiger.

Call it generosity on the part of the Commission which wants to give private discoms some time to settle itself in the Capital so that power sector privatisation in Delhi can become successful or laxity on their part, the fact is that there has been an increasing tendency on the part of the stakeholders to take the regulatory body for granted.

Because of its various orders in the past one year, particularly after the privatisation of the power distribution system in Delhi last June, and DERC's inability to enforce its directive in letter and spirit, the feeling that the regulatory commission can "only bark and not bite'' is fast sinking in among its stakeholders -- be it common consumers, government agencies or private players.

In fact, the DERC's orders at times tend to suggest that the Commission is increasingly becoming soft towards the discoms, and finds it difficult to protect the interest of the consumers. The latest orders of the Commission tend to make a reflection in this regard. While both the schedule of miscellaneous charges and the complaint handling procedure announced early this week -- can be termed in theory as people-friendly -- but the DERC is silent on the penalty to be imposed upon the private players in case these directives are not implemented.

There has not been single instance wherein a discom has been penalised for violations, even though the DERC has been receiving a large number of complaints against them and the regulatory body has found them genuine and the discoms guilty of overcharging the consumers.

Worst case is that of the fleecing of lakhs of poor people by the contractors of single point delivery system. Some three years after it was constituted, the regulatory commission has not taken any step to ensure that its tariff order is implemented in these areas, where consumers are paying Rs. 4.50 for one unit of power in place of the DERC tariff of Rs. 1.50. The Commission initiated any action in this regard only after privatisation took place. It has been nearly a year since it asked the discoms to explain the legal validity of the single point delivery (SPD) system, but an order from the regulatory body to bring to an end the fleecing of people is yet to come. Some DERC officials now argue that the new Electricity Bill -- under Section 14 (7) -- has provision for the discoms giving franchisee, which is a refined form of SPD system.

Further, because of an apparent soft attitude on the part of the Commission, the DERC officials are having a "tough time'' in receiving information from discoms. For instance, for the annual revenue requirement, some of the discoms were giving information as late as May, while the petition was admitted on March 6 or 7. Even before admitting the petition which was submitted by discoms and Delhi Transco in December 2002, the discoms were not willing to provide relevant date to the DERC. One particular discoms has emerged as a perpetual defaulter in providing information to the commission and still no penal action is being taken against it. Thus far, no quarterly report has been submitted by the discoms to the DERC on metering and billing regulations and same is the case other compliance reports also.

The regulatory commission is yet to give its licence to the discoms, the draft of which was submitted to it in September. It is only recently that the licence to the Delhi Transco was given. Interestingly, the licence seems to be a carbon copy of a similar license given to the transmission company of Andhra Pradesh, with minor changes here and there. The license to the private discoms has been delayed in view of the Electricity Bill 2003, which got the presidential assent a few days ago. License to Delhi Transco was strategically given before the Electricity Bill became an Act apparently to give some benefit to the power utility.

The manner in which the DERC is handling the issue of giving discom license to the Delhi Metro Rail Corporation (DMRC) tend to indicate that it is being delayed purposefully. While, DMRC has faltered at least twice in issuing public notices with regard to its application on license, the Commission has still not rejected the application that has been pending before it for the past six-seven months.

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