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Delhi's power regulator questions findings of expert panel

New Delhi: Delhi's power regulator DERC has defended a series of tariff hikes in the last four years, virtually questioning an AAP government appointed panel, which recommended disbanding of the quasi judicial body for failing

PTI [ Updated: July 05, 2015 13:07 IST ]
delhi s power regulator questions findings of expert panel
delhi s power regulator questions findings of expert panel

New Delhi: Delhi's power regulator DERC has defended a series of tariff hikes in the last four years, virtually questioning an AAP government appointed panel, which recommended disbanding of the quasi judicial body for failing to protect the interest of consumers.

Chairman of Delhi Electricity Regulatory Commission P D Sudhakar said the regulator increased tariff after considering rise in power purchase cost of the three private distribution companies which buy 95-98 per cent of the electricity as per long-term power purchase agreement.

"The long-term power purchase agreements were finalised by erstwhile Delhi Vidyut Board and all the three discoms buy 95-98 per cent of the power as per provisions of these pacts," Sudhakar told PTI.

Sudhakar said the long-term power purchase pacts were signed by Delhi Vidyut Board (DVB) for 25 to 35 years and discoms. The DVB, which used to supply electricity in Delhi, was disbanded in 2002 as part of reforms in the power sector.

Last week, a high-powered committee of former DERC chief Berjinder Singh, tasked by the AAP government to bring out a white paper on the capital's power sector, accused the regulator of failing to verify genuineness of short-term power purchase by the discoms.

In its report, the committee said when the power tariff should have been slashed between 2011 and 2013, the DERC hiked it several times, overlooking consumers' interest.

Interestingly, under Singh's chairmanship, the DERC in May 2010 had proposed to cut power tariff by 23 per cent, citing healthy financial condition of the private power distribution companies but the move was stalled by the then Congress government by exercising a special power under Delhi Electricity Act.

Sudhakar said he was yet to examine the Singh committee report but asserted that the short-term power purchase cost of the discoms is minuscule, indicating that the committee's observation on the issue was not based on facts.

According to official figures, around 80-90 per cent of total revenue of discoms goes into purchasing power from central and state government-owned entities through long term power purchase agreement at rates determined by the central and state regulators.

The committee, appointed in March, has recommended removal of Sudhakar and two other members. Sources said the Delhi government has the authority to remove the DERC chairman and other members. Sudhakar's five-year term will end next year.

Asked whether DERC was going ahead with announcing power tariff either in July or August, Sudhakar said the Commission is yet to take a final decision.

On June 12, the DERC had hiked tariff by upto six per cent as it restored a surcharge to compensate the private distribution companies for rise in power purchase cost.

The AAP government strongly criticised the DERC for the hike and said it was exploring legal option against the decision.

The Delhi government had asked the DERC not to hike tariff till the CAG submits its report on finances of the discoms.

Power tariff was a major issue for AAP during the Delhi  polls. The Kejriwal government had in February announced a 50per cent subsidy on monthly power consumption of up to 400 units till the government receives the CAG report on financial condition of the discoms.

In its first stint, the AAP government had ordered a CAG audit of all the three discoms, claiming they have been misleading the government and the DERC about their financial position.

The city has seen a series of hikes in power tariff in the past two years. The tariff was hiked by 22 per cent in 2011 followed by five per cent rise in February 2012.

The tariff was increased by up to two per cent in May 2012 and again by 26 per cent for domestic consumers in July 2012.

It was hiked by up to three per cent in February 2013 and again by five per cent in August 2013. It was increased by upto 7 per cent in November last year.

The cost of buying power has increased primarily on account of an increase in the input prices of raw material like coal and gas, officials said.

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