BSES discoms reject charge on AT&C losses issues

Last Updated: Sunday, January 12, 2014 - 21:47

New Delhi: Reliance Infra-backed BSES discoms, which supply power in 70 per cent areas of Delhi,have rejected allegations that they did not pass on financial benefit on account of bringing down AT&C losses to consumers, claiming it was negated by rise in power purchase cost.

Aggregate Technical and Commercial Loss (AT&C) loss indicates technical as well as commercial losses in the power distribution and transmission network.

In a letter to Delhi Government, CEOs of BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL) said increase in power purchase cost by over 300 per cent over past 10 years has fully negated benefits of AT&C loss reduction and created a deficit of over Rs 8000 crores.

The discoms said reduction of AT&C losses from 57 per cent in the year 2004 to 18 per cent in financial year 2013 have resulted a gain of Rs 19,258 crore for the two firms but the significant increase in power purchase cost actually left them with a deficit of over Rs 8,000 crore.

The increase in power purchase cost more than negated gains from AT&C loss reduction leaving BSES Discoms with deficit of Rs 8,146 crore before operating expenses, BRPL CEO Gopal Saxena and BYPL CEO Arvind Gujral said in the joint letter to Delhi`s Power Secretary Punit Goyal,.

"It is unfortunate that instead of recognising the substantial contribution of BSES discoms in reducing AT &C losses, supplying 24X7 quality power supply and providing world class consumer service, misleading and baseless allegations are being made, and the real issues leading to increase in power tariffs are not being addressed," they said ? The CEOs said cost of per unit of power has gone up to Rs 5.54 in 2013 from Rs 1.42 in 2004 which is an increase of around 300 per cent. The Additional Power Purchase Cost during the past 10 years was Rs 27,404 crore.

Tariff of Central Public Sector Undertakings is determined by Central Electricity Regulatory Commission and State Public Sector undertakings.

There have been criticism against BSES discoms for not passing on the benefit of reduction in AT &C losses to the consumers.

Both BRPL and BYPL have been maintaining that they are going through difficult financial condition. They have been demanding significant hike in tariff citing rise in power purchase cost.

The Tata Power Delhi Distribution Ltd supplies power in around 30 per cent areas in the city. Last week BRPL had sought Delhi Government`s intervention in overcoming its "precarious financial" condition in absence of a "cost-reflective" electricity tariff.

The company said it has been finding increasingly difficult to get bank loans due to delay in announcing a liquidation plan of existing regulatory assets and the new government`s approach towards tariff. According to DERC figures, the three private discoms operating in the city have a revenue gap of whopping Rs 19,500 crore.

The discoms were apparently unhappy with the government after Chief Minister Arvind Kejriwal, while announcing 50 per cent subsidy scheme, said that the amount payable to BSES discoms will be adjusted with their dues to government-run generating and transmission companies.

BRPL and BYPL owe over Rs 4,000 crore to Delhi Government-run power generation and transmission companies.

Sources said all the three discoms are likely to seek substantial hike in tariff when the DERC takes up the tariff review process later this month.

As per 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.

All the three discoms are also known to be unhappy with the government`s decision to order CAG scrutiny of their finances.

The power tariff in the city was hiked by 22 per cent in 2011 followed by five per cent hike in February last year.
The tariff was hiked by up to two per cent in May last year and again by 26 per cent for domestic consumers in July last year.
The tariff was hiked by up to three per cent in February and by five per cent in August.

PTI

First Published: Sunday, January 12, 2014 - 21:47

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