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DERC disregards discoms' suggestion

June 12, 2010 07:26 pm | Updated 07:26 pm IST - NEW DELHI:

The stalemate over tariff and reimbursements continues as the Delhi Electricity Regulatory Commission has now disagreed to the discoms' suggestion to allow a “limited true up” of their expenses.

The discoms had recently filed a petition seeking true up of their expenses made towards power purchase costs. The DERC in reply has stated the regulations of the multi-year tariff that do not allow true up based on only the purchase (expenses) amount.

According to sources, the discoms in a bid to seek some money from the DERC had petitioned that they should be allowed true up costs for the power that they had to purchase on higher rates. “But the DERC cannot allow that since the MYT clearly states that true up can be done only on the basis of all uncontrollable items, which includes the sale and purchase of power,” said a source.

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“In their petitions the discoms have suggested that only expenses made should be trued up, while nothing has been said about the money that they make on selling power. The discoms have been maintaining that they have run up huge expenses on account of purchase of expensive power in 2009-10. So they want the DERC to compensate that expense.”

Citing an example, the source said a discom for instance has cited Rs.2,588 crore as the expense incurred on purchase of power but the audited accounts show that they also made Rs.3,274 crore from sale of power. “The discom wants the DERC to true up the charges, claiming that they had allowed them only Rs.200 crore on that account. The DERC's contention is that if the difference between the sale and purchase figures is more than Rs.200 crore then they have a surplus and therefore, do not need a true up,” the source said

As for the discoms' other petition the power purchase cost adjustment should be carried out quarterly. The DERC has said the formula can be adopted only when the tariff order is announced. “The discoms have said the formula should be adopted only if there is increase in cost of power. It means that discoms will be reimbursed extra expenses incurred on purchase of power, but have not mentioned what should be done if spend less on buying power than what has been allowed,” said a source.

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