Power regulator hikes tariff by five per cent, but Delhi Government steps in to soften the blow through subsidy

Ahead of the Delhi Assembly elections, consumers in the city have been spared a steep power tariff hike. Ending all speculation of a sharp hike in power tariffs, the Delhi Electricity Regulatory Commission on Friday announced a five per cent across the board hike for all consumers starting August 1; but the impact of the hike was neutralised by the subsidy announced by the Delhi Government later in the day.

While there is no hike for consumers using between 0-200 units and 201-400 units after the Government’s subsidy, for the high-end consumers the hike will effectively vary between 0.5 per cent and four per cent in different parts of the city.

Since the DERC has merged the five per cent across-the-board hike with the existing quarterly power purchase cost adjustment (PPCA) surcharge being levied, the effective hike in power tariffs will be 0.5 per cent for consumers in BRPL and BYPL areas, two per cent in the TPDDL area and four per cent in the NDMC area. The PPCA is currently 4.5 per cent in BSES areas, three per cent in TPDDL area and one per cent in NDMC area.

But with the Delhi Government’s subsidy there are several categories in several areas where the tariff is expected to fall below the current charges.

As per the new tariff order, consumers in the domestic category using between 0 to 200 units will pay Rs.2.70 per unit (after including the subsidy given by Delhi Government); and for those consuming between 201 to 400 units the government has introduced a subsidy for the first time of 0.80 paisa per unit. As a result, the tariff is reduced to Rs.5 per unit, which is even lower than the current tariff of Rs.5.50. For those consuming between 401-800 units Rs.6.80 per unit will be charged, and Rs.7 per unit for 800 or more units for the domestic category.

The new tariff slabs will be in place from August 1 to October 31, after which based on the quarterly review of the PPCA the new surcharge will be announced.

“After studying the petitions of the discoms and taking into account their revenue collection and surplus we have decided to hike the power tariff across all categories by five per cent starting August 1. Since, the prevailing tariffs include the PPCA surcharge varying from three per cent [TPDDL] to 4.5 per cent [BSES], there is no significant increase in charges during the financial year 2013-14 and the energy bills of consumers are expected to change marginally,” said DERC chairman P.D. Sudhakar.

Consumers will continue to pay eight per cent surcharge on the total bill to allow liquidation of the accumulated deficit of the power companies.

Justifying the continuation of the eight per cent surcharge, Mr. Sudhakar said: “The collections from the surcharge has helped in bringing down the accumulated debt of the discoms. The deficit has now fallen to Rs.7,189 crore. The discoms have a revenue surplus of Rs.911.91 crore for the FY 2013-14. Recovery of past dues has begun and this will be addressed in the near future.”

Giving in to public demand for a more structured slab system that will tax guzzlers instead of burdening lower-end consumers, the DERC has introduced a new slab of 401-800 units. Now the slab structure will be 0-200 units, 201-400 units, 401-800 units and 800 units and above.

The DERC chief said even with the new tariff hike, Delhi will continue to have power tariffs much lowers than that of neighbouring Noida, Ghaziabad and Gurgaon and metros like Mumbai, Bangalore and Hyderabad.

The DERC has also announced that the time of day metering model that was followed for consumers with a sanctioned load of 300 KW and above will now be introduced for all commercial and industrial consumers with a sanctioned load of 100 kW and more. The surcharge on energy charges during April-September during the peak hours of 3p.m. to 8 p.m. will be 15 per cent and the rebate for non peak hour usage between 12 a.m. to 6 a.m. will also be 15 per cent. From October-March, the 5p.m. to 11 p.m. peak slot will invoke a energy surcharge of 10 per cent and the rebate on use during the non peak hours of 11p.m. to 6 a.m. will be 15 per cent.

The DERC has also announced that it will extend a help of Rs.20 lakh from the tariff collection to the consumer advisory cell of the Public Grievance Cell of the Delhi Government to help consumers with advisory services. It will also offer Rs.50 lakh to the PGC for undertaking meter testing drive for consumers. “If the meters are found faulty, the discoms will have to pay for the testing, but if they are found working properly the consumers will have to bear a part of the cost,” said DERC member J.P. Singh.

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