DERC issues show-cause notice to discoms for 'order violation'

New Delhi: The fight between private discoms and power regulator DERC over tariff fixation intensified on Friday with the statutory body issuing show-cause notice to all three companies for speaking to the media on the issue in violation of its earlier order.

In a virtual showdown in their fight with DERC, private discoms had yesterday held the press conference accusing the authority of taking a "myopic approach" towards their "justified demand" for a hike in tariff.

The discoms, bolstered by government's sympathetic approach towards their demand, had also warned about a "serious situation" if tariff is not hiked.

The DERC, earlier had issued a gag order to the discoms not to speak to media on the issue of tariff.

"From today's newspapers, it is clear that you have held a press conference yesterday and apparently you have spoken on matters relating to tariff determination for the year 2010-11 even though the tariff petitions are pending before the commission," the DERC said in the show-cause notice.

The statutory power regulator has also directed the discoms to explain how the press conference is not violative of the directions of the commission.

Asked what kind of action the DERC can take if reply of the discoms was not satisfactory, an official said "DERC is a judicial body and it is empowered to take appropriate action including imposing hefty fine."

The discoms have been demanding a substantial hike in power tariff for the fiscal 2010-11 claiming that the total combined deficit of three discoms stood at Rs 2,600 crore.

However, the DERC had indicated that all the discoms are having a very healthy surplus in their kitty and hinted that power tariff may be cut down further.

Taking a sympathetic approach towards the discoms' demand for 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.

Seeking a "cost reflective tariff structure", the three discoms -- BYPL, BRPL and NDPL-- said they had bought power at a very high rate during last summer following a communication from DERC where it was stated that money would not be an issue.