Power tariff: Govt asks DERC not to go for populist measures

Amid its ongoing tussle over fixing new power tariff with the DERC, Delhi Govt today said the regulator should not go for "populist" measures.

Last Updated: Jun 01, 2010, 20:41 PM IST

New Delhi: Amid its ongoing tussle over
fixing new power tariff with the DERC, Delhi Government today
said the regulator should not go for "populist" measures and
must consider the overall reform process in the sector while
finalising new rates.

A top official in the Chief Minister`s office,
indicating a hard stand on the issue, said government would
not allow the Delhi Electricity Regulatory Commission to
announce the new tariff order if it failed to address genuine
grievances of distribution companies.

Sticking to its position of favouring a cut down in
power tariff for 2010-11, the DERC on Friday had shot off
letters to all three private discoms charging them of
misleading the government by submitting inaccurate facts while
demanding a tariff hike.

Picking hole in DERC`s calculation in preparing the
new tariff order, the official, who wished not to be named,
said the regulator finalised the tariff structure on the basis
of discoms` audited accounts for the year 2008-09.

"The DERC has not taken into consideration the audit
report of the three discoms for 2009-10. The discoms bought
power at a very high rate last summer and if that cost is not
adjusted now then people will have to be burdened with a very
hefty hike next year as the interest component will also have
to added," he said.

The official said "DERC will not be allowed to take
decisions arbitrarily."

The tussle between the DERC and the government began
after the power department, exercising a special power under
the Delhi Electricity Act, had directed the regulator on May 4
not to announce new tariff structure and asked it to submit a
report on the entire issue.

The government move had come after the discoms
submitted a representation to the government requesting it to
direct the DERC to hike the tariff.

The DERC after receiving the government directive had
indicated that it had planned 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.

The regulator had also sent a letter to the Government
yesterday strongly objecting to any tariff hike.