Originally Published 2004-06-18 12:38:48 Published on Jun 18, 2004
The Delhi Electricity Regulatory Commission¿s latest tariff order for the year 2004-05 has once again increased average power tariffs by almost 10% and hit the poor the hardest even as private utilities have virtually failed to control billing losses and power thefts.
Tariff hike generating Public heat
The Delhi Electricity Regulatory Commission's latest tariff order for the year 2004-05 has once again increased average power tariffs by almost 10% and hit the poor the hardest even as private utilities have virtually failed to control billing losses and power thefts. 

The DERC's latest tariff hike, on the heels of last year's increment on nearly 4%, brings no respite to the average consumer from erratic power cuts and billing problems. As per the new tariff order those consuming less than 100 units per month will bear the brunt of the tariff hike with charges going up to Rs 2.2/unit against the existing Rs 1.75/unit and fixed charges doubling to Rs 20/kw from the existing Rs 10 ;in effect a 25% hit on the monthly power bill. The unauthorised and unelectrified colonies will also see the flat rate shoot up to Rs 240/month from the existing Rs 175/month while residents of cooperative societies will also their power bills shoot up by 10% after availing a rebate of 15% available to them .Commercial and industrial users will now have to cough up 75% more on fixed charges, up at Rs 35/kw/month as against the existing Rs 20, while agricultural consumption tariff has also been moderately increased.

The Discoms in the capital, NDPL, BSES Yamuna and BSES Rajdhani, have also been subjected to a nearly 30% hike in bulk power tariffs from the Transco with rates for NDPL going up to 221.56 paisa /unit as against the existing 157.54 and that for BSES Yamuna and BSES Rajdhani going up to 165.47 paisa/unit and 207.78paisa/unit from 125.94 paisa and 160.05 paisa respectively. This coupled with the reported aggregate technical and commercial (AT&C) losses, of 44.86% for NDPL and 45.06% and 54.29%for BSES Rajdhani and BSES Yamuna, means a revenue gap of Rs 1,762 crores between the Transco and Discoms books, despite the steep increase in power tariffs. The Delhi government is likely to bridge the gap with Rs 690 crores still leaving a substantial Rs 1,072 crores unbalanced. 

Since the privatisation of distribution services, almost 3 years back, the Delhi government has forked out nearly Rs 3,500 crores on power reforms, subsidy and financial assistance but the quality and reliability of electricity services has only gone down-hill ever since. Privatisation of Discoms was supposed to usher in uninterrupted supply of quality power at competitive rates but the tenure and frequency of outages in the capital, especially during the current summers, have been such that the same regulator was forced by agitated customers to order the Discoms to install gensets to counter the problem. Earlier this year consumer complains over billing and metering irregularities had reached such proportions that the state Chief Minister had to pull up the erring Discoms. The governments orders in March 2004 granting the discoms wide ranging seize and search powers under section 135 of the Electricity Act 2003 in this context was not seen as one to curb the menace of electricity theft but one that could be used to settle personal scores and harass the small consumer 

The falling for the electricity sector in the capital can easily be equated to the following equation .The cost of electricity per unit in Delhi ,including Discom costs, comes to about Rs 5.05/unit .Even after the current tariff revision ,barring a few industrial categories, the majority of the consumers continue to be subsidised. The obvious course of action would be the unusually high AT&C losses at nearly 50% and should be bought down to around 15% ie reduced to a third. The justification for privatisation had been that private operators with well paid executives would be less prone to 'compromise' and that the honest paying consumer would be the big winner with efficient and reliable service at his doorstep. The experience so far has done little to believe so or the likelihood of the same in the near future.

The other big culprit continues to be the farm sector consumption on the capital's outskirts comprising mostly of farmhouses which continue to be served for as less as 125 paisa per unit. The housing societies ,comprising the middle class, also continues to enjoy a rebate( subsidy) of 15% while those staying in unauthorised colonies and villages can avail unlimited use of electricity for a flay Rs 240 /month. The tentacles of subsidy are thus well entrenched in all strata of the society and the revenue arrears on the state's electricity bill are not hard to fathom.

The DERC while formulating future tariff orders should step aside from the tariff increase revenue balancing formula to an internal auditing exercise of the constituents of such losses. The 'villages' in Delhi are not the appalling epitome of rural India and nor do middle class/rich constituencies be allowed to live -off the loopholes in the system. The loci, however, should be the despicable AT&C losses the private Discom's have been showing year after year. Its time the regulator asked the private Discom's to justify the process of privatisation failing which the consumer might just reconcile himself to the 'good old days' of the SEB's.

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