DERC hikes power tariff, Kejriwal threatens to scrap licences

NEW DELHI: Power tariffs in Delhi will rise about 6-8 per cent immediately, the electricity regulator ruled, hours after Arvind Kejriwal’s high-voltage conflict with the private distribution firms reached a flashpoint with the chief minister threatening to terminate the licenses of discoms.

The Delhi Electricity Regulatory Commission ordered higher tariffs to compensate discoms for higher cost of power purchase in previous quarter.

The increase, in the form of a “power purchase cost adjustment charge” will be about 6 per cent for BSES Rajdhani, 7 per cent for Tata Power Delhi Distribution, and 8 per cent for BSES Yamuna, which had threatened to cut supplies for 10 hours a day.

Kejriwal responded angrily to the threat and said he could replace the discoms with others if they continue to take a confrontationist approach towards the government. The threat to terminate discoms’ licenses ironically mirrors warnings issued in the past by former Chief Minister Sheila Dixit, whom Kejriwal’s party accuses of colluding with the discoms to fleece consumers.

Last year, Dixit had threatened stern action if the discoms did not take immediate steps to improve power supply.

Sector experts said Kejriwal did not have the power to arbitrarily terminate the licence of a discom. His government has to approach the regulator if it has differences with the discoms, former power secretary Anil Razdan said.

“One can cancel licence by following the law. There is a prescribed procedure for awarding or cancelling the license of a distribution company. And the power for the same lies with the electricity regulator,” Razdan said.


While Kejriwal and the private companies are publicly at war, no meeting has been called by the state government to discuss the issue. Kejriwal has ordered an audit of accounts of the discoms by the Comptroller and Auditor General of India, which the companies have challenged in court. Aformer power minister also questioned Kejriwal’s assertion.

“The government can audit private discoms’ accounts since it is paying subsidies for electricity consumers. Government has rights to know how its subsidies are being utilised. But it does not have rights to cancel distribution licence,” he said. Separately, NTPC warned BSES Yamuna that it would cut off supplies unless dues of Rs 180 crore were paid by Friday evening.

BSES has already written to the Delhi government that low tariffs had made its financial position precarious and banks were not willing to lend money in such a situation. The company is therefore unable to pay the bills of power producers. NTPC that supplies over 800 mw to BSES Yamuna has rejected the Kejriwal government’s request for continuing supply.

Kejriwal has alleged that the discoms had managed to get higher tariffs by fudging their accounts and inflating costs. During his election campaign earlier, Kejriwal had asked consumers not to pay their electricity bills till the time the government slashes power tariffs.

Soon after being sworn in as chief minister, he ordered a 50 per cent cut in tariffs for many consumers, as promised in his election campaign. Reacting to Kejriwal’s statement, a top executive with one of the discoms said that the state government has no powers to withdraw electricity distribution licences. “The Delhi Electricity Regulatory Commission only has powers to award or withdraw distribution licences. And, no private company would like to come and operate in Delhi in such circumstances,” he said.