DERC says Government has not yet approached it on the issue
The Delhi Electricity Regulatory Commission (DERC), mandated to fix power tariffs in the Capital, has not received any request for their downward revision from the Delhi Government.
“The Government has not yet contacted the regulator on the issue of power tariff. We are not reviewing the existing tariff structure,” DERC Chairman P.D. Sudhakar told reporters on Monday.
After taking oath, Chief Minister Arvind Kejriwal had on Saturday said that the decision to reduce the power tariff would be taken in four or five days. The Aam Aadmi Party has promised to reduce the power tariff by 50 per cent.
Mr. Sudhakar further said that it would take at least three months to modify the current tariff if such a proposal was sent to it. “The regulator will have to follow the set procedure, including calling all the stakeholders for a public hearing, before deciding the rates,” Mr. Sudhakar said.
Power experts said the government will have to take the subsidy route to implement the promise of slashing tariff as that will be an executive decision. As per estimates, the government will have to incur an annual expenditure of around Rs.5,000 crore if it decides to halve the power rates for around 40 lakh domestic consumers.
According to DERC figures, the three private discoms operating in the city have a whopping revenue gap of Rs.19,500 crore. Power experts said any move to cut tariff will adversely impact the operation of the discoms in the city.
As per official figures, around 80-90 per cent of the total revenue earned by discoms goes into purchasing power from Central and State Government owned entities through a long-term power purchase agreement, at rates determined by the Central and State regulators.
The experts said discoms’ cost of buying power from generating companies has increased by around 300 per cent in the last two years while the power tariff, in the corresponding period, has risen by around 70 per cent. “This virtually non-cost reflective retail tariff has led to a huge build up of future receivables (regulatory assets) to the tune of over Rs.19,500 crore, impacting the sustainability of operations of the Delhi discoms,” said an expert.