Staff reporter

Residents' welfare associations slam Sheila Government decision to hold back tariff revision

NEW DELHI: The last-minute change in the announcement of new power tariff for the Capital has left a vast majority of citizens angry. Members of various residents' welfare associations have criticised the Delhi Government decision to withhold the tariff announcement and questioned the premise for the order to hold back the tariff revision.

“In 2002 when we had approached the High Court to restrain the Delhi Electricity Regulatory Commission from fixing the tariff order, we were told that the Commission cannot be expected to sit back. So what has changed between then and now, how has the Government asked the Commission to virtually sit back?” questioned Anil Sood of non-government organisation Chetna on Wednesday.

Accusing the Government of failing to live up to its word, he said: “They had assured us at the time of the last revision that tariffs in Delhi are only expected to go down further and now when the time came to walk the talk, they have stopped the DERC from announcing the tariff.”

Consumers are also unhappy that their views submitted at the time of public hearing conducted by the DERC seem to have gone waste. “What was the point in seeking our views and making us go through petitions if in the end the whole exercise has to be abandoned?” said Rajiv Kakria of Greater Kailash-I RWA.

He said RWAs were contemplating legal recourse. “We will seek legal help and approach the court. We want to know the locus standi of the DERC. We want to know the logic behind NDMC areas getting cheaper and more power than the rest of the city, where the bulk of the population stays.”

Meanwhile, the three discoms on Wednesday denied the DERC claims that they have made huge profits during 2009-10. They asserted that their financial condition remains precarious.

“The misconception (about profits) seems to have arisen by simply subtracting total input power cost from operating revenues, which is Rs.2,810 crore. In reality after providing for all expenses, BYPL actually incurred a loss of Rs.186 crore. However, considering the accrued regulatory assets of Rs.262 crore of past years, BYPL reflected Rs.76 crore as profit in the balance sheets. This profit has only accrued in the books and is not an actual cash flow,” said a company spokesperson.

“BYPL in the last seven years of existence has sustained its operations on borrowings from various commercial banks and today has over Rs.1,525 crore of outstanding debts. A majority of this was used only for sustaining regular operations,” the spokesperson said.

This precarious financial situation has arisen because of artificial assumption of surplus revenue by regulators based on unrealistic lower power purchase estimates, the company claims.

NDPL for its part has denied making profits too. In a statement here the company claimed that the profit of Rs.716 crore being projected as its surplus is the difference between accrued net sales and power purchase costs. “The accrued net sales include Rs.671 crore, which is yet to be recovered through future tariffs to be fixed by DERC.”


“Thus only net Rs.45 crore is available for meeting other expenses totalling to Rs.645 crore, which include employee costs and arrears paid because of the Sixth Pay Commission, repair and maintenance expenses incurred, depreciation allowance used for repayment of capex loans taken and income tax paid,” said an NDPL spokesperson.

The company claimed that after meeting these expenses, there is a net cash loss of Rs.600 crore.