Regulator asks Delhi Govt. to bail out discoms

February 14, 2013 10:44 am | Updated 10:44 am IST - NEW DELHI:

Taking the first steps towards resolving the liquidity crisis of the city’s three discoms, the Delhi Electricity Regulatory Commission (DERC) has sent a ‘statutory advice’ to the Delhi Government, asking it to pitch in with financial help and urge the Centre to announce a bail out package for the companies.

The three discoms -- BRPL, BYPL and TPDDL -- with a collective regulatory assets of over Rs. 20,000 crore have declared that they may not be in a position to continue distributing power unless there is an immediate and a substantial relief package announced by the Government.

The discoms have also informed the DERC that their poor financial state and credit rating has made it difficult for them to secure loans and therefore are unable to purchase power for the city.

Accepting the contentions of the discoms, the Regulator has urged the Delhi Government to “take urgent steps so that benefits of various Centre-sponsored schemes are extended to the Delhi distribution utilities, and, in turn, to the electricity consumers in Delhi”.

It has cautioned that the failure to do so will result in tariffs in the city becoming “unsustainable, especially when compared to other States”.

The Regulator has suggested that the Delhi Government take up the issue of extending scheme likes the Accelerated Power Development and Reform Programme and the Jawaharlal Nehru National Urban Renewal Mission scheme to Delhi as well, because the city remains deprived of these benefits, since power distribution has been privatised.

“The Commission is of the view that denial of the benefits of these programmes [APDRP, JNNURM] to the distribution entities of Delhi does not effect the management of these distribution companies but, in fact, denies the benefit of the schemes to the consumers of electricity of Delhi who are as a result required to pay higher tariffs…” the DERC has written.

It has also pointed out that Delhi has lost out on the benefits of a financial bail out package introduced by the Centre for restructuring of state distribution entities. “The Delhi Government may take up with the Ministry of Power to sanction the bail out package for the discoms. This would be the single most important measure for deferring the incidences of high levels of past revenue gaps on the tariff determination process,” the DERC has said in the statutory advise.

The Delhi Government has been asked to pitch for adequate coal allocation to Dadri, Badarpur Thermal Power Plant and Jhajjar from those coal mines from where transportation is shortest or alternatively to allocate additional power to Delhi from the pit-head stations of NTPC so the spending on power purchase, which forms the bulk of the discoms’ expenses can be curtailed.

Adequate gas

It has also suggested allocation of adequate gas for the power stations like Bawana and Pragati, so that the cost of power generation here is within “manageable limits”.

Pointing out the ramifications of an enormous tariff hike, which will be inevitable unless there is a financial bail out, the DERC has said the government should consider that not only will the domestic consumers be saddled with a huge hike in their monthly bills, but also impact services likes healthcare and railways and bears an impact on other institutions of national importance.

“The Commission has already commenced the process of tariff determination for the financial year 2013-14. There have been two significant increases in the past less than 2 years, which have collectively resulted in enhancement of electricity bills by over 50 per cent since August 2011. Even though the present tariff levels are more or less at par with those prevailing in NCR region, this has already resulted in a high level of public resentment,” the Regulator has written to buttress its assertions about the magnitude of the crisis.

Top News Today


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.