New Delhi, May 05: Sheila Dikshit on Tuesday invoked a legal provision she has never used before to suspend announcement of this fiscal’s power tariff and let the city’s power companies argue their case for more funds.
The chief minister, who holds the power portfolio, directed the city’s power regulator, the Delhi Electricity Regulatory Commission ( DERC), to have consumers billed according to the existing tariff for now.
She asked the regulator to first hear out the power companies and advise the government on the issues they have raised before fixing the tariff.
The companies are demanding that last fiscal’s collective revenue shortfall of nearly Rs 1,000 crore should be refunded to them through an increase in the tariff.
A senior power official said the turn of events show the government has thrown its support behind the power companies. “ The chief minister had last week informally asked the power regulator to resolve the companies’ grievances but to no effect. The government issued the directions on Monday after power companies complained they weren’t being taken seriously,” said the official.
Expense companies incur on buying electricity is usually factored into tariff determination only two years later once their accounts are audited. So if a company spent Rs 100 on buying power in 2009-’ 10, the refund through tariff comes only in 2011-’ 12.
But companies are insisting the reimbursement be paid this fiscal, power officials said. However, the regulator scheduled to announce the latest tariff by Wednesday rejected this demand repeatedly over the last few months.
Ever since private companies took over the job of power distribution in Delhi from the public sector eight years back, the regulator has been fixing power tariff without any government intervention whatsoever.
But Dikshit on Monday used a parliamentary legislation, the Indian Electricity Act, to force the power regulator to examine the power companies’ demands. “ The government felt the issues raised by distribution companies are serious and has accordingly directed the DERC to… submit its statutory advice on these issues to the government,” a press release from her office read.
Power secretary Rajendra Kumar said Section 86 ( 2) ( iv) of the Act allows the government to take the regulator’s advice on matters related to generation, transmission, distribution or trading of electricity.
“ Determining tariff is still the power regulator’s prerogative.
We have only asked the regulator to give us a statutory advice on demands of the companies and how to address them,” said Kumar.
But a senior government official involved in the developments said the government can, in the coming days, also invoke Section 108 of the electricity Act to issue any direction that will be binding on the regulator.
The city’s private power companies — the BSES Rajdhani Power Limited, the BSES Yamuna Power Limited and the North Delhi Power Limited — have complained of severe cash flow constraints that could hamper sufficient power purchase this year. Their revenue gaps have accumulated beyond sustainable levels and rising debt- to- equity ratio has made procuring bank loans to run operations difficult.
—Agencies