The Delhi Distribution Companies (DISCOMS) have submitted their petition to the Delhi Electricity Regulatory Commission (DERC) for truing-up till the year 2021-22 and the Aggregate Revenue Requirement (ARR) and Tariff for 2023-24.
In their true-up (reconciliation of actual and estimated accounts) petitions, the discoms have shown a revenue gap of Rs 2,906 crore. The aggregate revenue requirement (ARR) petitions project a standalone revenue gap of Rs 7,817 crore. The petitions were uploaded on the Delhi Electricity Regulatory Commission (DERC) website. As mandated, the discoms submitted their ARRs — practically their annual budgets — to the DERC on May 22.
Earlier, the DERC had asked power distribution companies and other electricity utilities to submit their annual revenue requirement (ARR) figures by May 21 to help it initiate the procedure to determine the power tariff for the 2023-24 fiscal year. There has been no tariff hike in Delhi after 2014. In its last tariff order of 2021-22, the DERC had increased the pension surcharge from 5% to 7%, leading to a marginal increase in bills, but there was no change in the per unit charge consumption of electricity.
“In a tearing hurry, the single-member DERC accepted the petitions on May 26, 2023, while the regulatory body is without a Chairperson and Member Finance, and the lone member is set to demit office on August 1, 2023. Most notably, DERC choosing not to wait for the imminent appointment of the Supreme Court directed Regulator’s Chairperson, which is just few days away, has raised eyebrows in the industry circles,†sources said.
The True-up petitions from the DISCOMs, which basically reconcile projected versus actual expenses, have shown a substantial stand-alone revenue gap of around Rs 2906Cr –NDMC (Rs. 252 Cr), BRPL (Rs.1289 Cr), BYPL (Rs. 525 Cr), and TPDDL (Rs.841 Cr). In their ARRs, the DISCOMs have projected revenue gaps for FY 2023-24 of Rs. 7817 Crore (New Delhi Municipal Council (NDMC) Rs 357 crore, BRPL Rs 3794 crore, BYPL Rs 1629 crore, TPDDL Rs 2037 crore).
No official response was available from the BSES, BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL) or Tata Power Delhi Distribution Limited (TPDDL) over the issue.
Even in the last tariff order, the DERC had recognised regulatory assets (revenue gap) of over Rs 9,000 crore. Despite the recognition, this amount has not been ammortised (given) to the discoms. Even huge regulatory assets (revenue gaps) consequent to the Orders of the Supreme Court, the ATE as well DERC are yet to be recognised by the DERC.
Since there has been no tariff increase since 2014, the discoms have requested the regulator to allow a cost-reflective tariff for FY 23-24 to maintains uninterrupted and quality power supply to the consumers of Delhi.
“Significantly, while DERC is mandated to consider both truing-up and ARR petitions in tariff calculations, it has swiftly overlooked considerable legal and regulatory realities. This has cast a shadow of doubt on the motives of the single-member DERC,†sources added.
Compounding the issues, DERC has been operating with just a single member since the former Chairperson’s retirement on January 9, 2023, and the absence of a Member Finance since June 2020. The incumbent Member Technical is also approaching retirement on August 1, 2023. . This situation stirs up doubts regarding the motives of the single member DERC.
“The DERC’s hurried tariff determination process contravenes established guidelines and law, and the rapid implementation of the Business Plan Regulations by the one-member DERC appears to place an additional interest burden on consumers. Further concerns arise from the curtailing of crucial expenses, particularly O&M expenses, potentially affecting maintenance activities and, in turn, the consumers,†sources added.
