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Discoms slam DERC`s rigid attitude against tariff hike

Last Updated: Friday, May 7, 2010 - 00:53

New Delhi: In a virtual showdown in their
ongoing turf war with statutory power regulator DERC, private
discoms today accused the authority of taking a "myopic
approach" towards their demand for a tariff hike and said the
rigid attitude may lead to a "serious situation".

All the three discoms, bolstered by government`s
sympathetic approach towards their demand, held a joint press
conference defying DERC gag order not to speak to media, where
they forcefully justified their demand for a tariff hike.

"We are having a major problem of cash flow. If our
concerns are not addressed, then the consequences could be
very serious," said Sunil Wadhwa, CEO of Tata-backed discom

BSES officials said the total combined deficit of
three discoms stood at Rs 2,600 crore and rejected the claim
that they were having a healthy surplus.

Taking a sympathetic approach towards demand of a hike
in tariff, the government, using a special provision in the
Delhi Electricity Act, on Tuesday had directed DERC not to
announce the annual tariff order for the year 2010-11 till it
reexamines petitions from discoms.

"The issues raised by the discoms are very serious and
need to be examined thoroughly so that the sustainable model
of tariff as prescribed under section 61 and 62 of the Act.

The DERC, which was making last minute preparations to
announce the new tariff order, after receiving the directive
had indicated that it was planning to cut down the tariff by
20 to 25 per cent as discoms would have a surplus of around
Rs 4,000 crore if the existing tariff was not tinkered with.

Seeking a "cost reflective tariff structure", Wadhwa
said all three discoms had bought power at a very high rate
during last summer following a communication from DERC in
which it was stated that money would not be an issue and the
companies should procure power from the open market so that
people do not face any power cuts.

"It is totally not correct that we have a healthy
surplus. Our total revenue shortfall for the year 2009-10 is
Rs 680 crore...The banks have started refusing us any
lending," he said.

Holding that the problem of cash flow in all the
discoms was serious, Wadhwa said NDPL would seek a loan of
Rs 700 crore from the city government as banks have refused to
give loan to the company.

Asked DERC`s argument that discoms would no longer
require to buy power from open market once upcoming power
plants in Delhi starts generating power, the discoms said they
were not sure when the plants in Bawana, Jhajhar and Dadri
will start generation.

"In that case, the tariff structure could be reviewed
quarterly. They can review it once the power plants starts
functioning," Wadhwa said.


First Published: Friday, May 7, 2010 - 00:53
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