Delhi discoms to get Rs 8,000 cr in dues over 8 years, may not hike power tariffs

Mar 11 2014, 16:24 IST
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Summary* The move may not lead to tariff hike for consumers

The Delhi Electricity Regulatory Commission (DERC) has approved liquidation of Rs 8,000 crore, out of Rs 11,431 crore, of provisionally estimated regulatory assets (RAs), as at the end of March 2012, owed to private discoms — BSES Yamuna Power, BSES Rajdhani Power and Tata Power Delhi Distribution Company — over the next eight years, beginning 2014-15.

However, this may not lead to any tariff hike for consumers as surplus generated by discoms over these years will be adjusted against recoverable RA, said DERC chairman PD Sudhakar. The three discoms have had a surplus of R900 crore in their annual revenue requirements (ARRs) for 2013-14.

But the 8% surcharge on tariff imposed by the regulator two years ago, to help discoms recover RA, will effectively increase to about 11% if carrying costs (interest) on RAs are included. This will add to tariffs. Of course, any deferment of the recovery of RAs would have jacked up the interest costs and consequently the budren on the consumers.

With the DERC laying out roadmap for liquidation of RA, the private discoms can now access bank loans to finance purchase of electricity from central generating stations like NTPC and NHPC who have threatened to disconnect power supplies to Delhi discoms but cannot go ahead as they have been restrained by the Supreme Court.

The DERC will review status of RA as part of the periodic exercise to determine discoms’ ARR. The regulator is expected to issue tariff order for 2014-15 by July end.

Delhi discoms’ combined RAs is seen to reach R20,000 crore as at end of March 2013, although this is yet to be vetted by the regulator. Sudhakar told FE: “There will be no addition tariff burden on consumers due to liquidation of RA as surpluses that discoms generate in coming years (as they did in 2013-14) will be adjusted against recoverable RAs.” He added: “Discoms are now getting cost-reflected tariff as power purchase costs are being adjusted on a quarterly basis.” The RAs for 2012-13, he said, would be finalised later, based on the audited balance sheet submitted by the discoms recently.

According to Sudhakar, the DERC has deliberately taken recoverable RA on the lower side as a truing-up exercise, currently underway, which may lead to reduction in the provisional estimates.

However, the final figures may vary depending on the findings of the Comptroller

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