Coming to the aid of power consumers in the city, the Appellate Tribunal for Electricity has upheld the Delhi Electricity Regulatory Commission’s earlier judgment of disallowing power distribution company BSES Rs.950 crore as expenditure. The judgment will spare the consumers a steep hike in tariffs.
“If the DERC had allowed the expenditure, tariffs would have gone up by 70-80 per cent. This judgment is totally in favour of the consumers, because the grounds on which this expenditure was incurred have not been found to be genuine,” said a Power Department official.
In 2008, the DERC had refused to allow the Rs.950 crore expenditure cited by the company on the grounds that the transactions were not “genuine” and were manipulated.
The DERC has accused the discom of hiding facts and had accused the company of making purchases from its sister companies at highly inflated prices. “The Commission noted that in 2004-05, BRPL and BYPL claimed to have made purchases worth Rs.1,233 crore from Reliance Energy Limited, but the VAT receipts showed the expenditure at Rs.731 crore. DERC had contended that a 78 per cent margin was unfair to power consumers,” said the official.
Piqued by the DERC’s decision the discom had filed a petition in the Appellate challenging the tariff order passed in February 2008. However, much to the relief of the consumers and the Commission, the Appellate has turned down their appeal.
To the discoms’ objection that the Commission was divided over the issue of tariff hike and the DERC chairperson was not entitled to vote, the judgment citing Section 92(3) of the Electricity Act has said that in the event of the members of the Commission being equally divided on any issue relating to tariff fixation, the chairman has to be given a casting vote.
The Appellate has also decided not to interfere in the DERC’s judgment to allow only 5 per cent increase in the purchase price of equipment. As opposed to the company’s claims of allowing a 78 per cent hike in prices, the Commission had allowed only 5 per cent.
BSES had petitioned the Appellate alleging that the Commission has disallowed the projections made by them and in the process caused a loss of Rs.886.07 crore in the financial year 2008 and Rs.1458.65 crore in the financial year 2009.