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DERC's new power tariff for FY21 will add to financial challenges of discoms, says TPDDL

The Delhi Electricity Regulatory Commission (DERC) announced the new tariff on Friday, saying no hike was considered due to the COVID-19 pandemic

twitter-logoPTI | August 29, 2020 | Updated 15:49 IST
DERC's new power tariff for FY21 will add to financial challenges of discoms, says TPDDL
TPDDL supplies electricity to around 18 lakh consumers in north and northwest Delhi

The new power tariff announced by the DERC for 2020-21, without any hike in the existing rates, will "substantially increase" the financial "challenges" and affect the "ability" to ensure round-the-clock electricity supply by the discoms in Delhi, a spokesperson of the TPDDL said on Saturday. The Delhi Electricity Regulatory Commission (DERC) announced the new tariff on Friday, saying no hike was considered due to the COVID-19 pandemic.

"Considering the COVID-19 pandemic, the DERC has maintained the tariff at the existing level. However, for the discoms, this tariff order will substantially increase the financial challenges and hence, the ability to ensure 24x7 power supply," the spokesperson of the Tata Power Delhi Distribution Limited (TPDDL) said. TPDDL supplies electricity to around 18 lakh consumers in north and northwest Delhi. The BSES discoms -- BRPL and BYPL -- cover the rest of the city, serving around 43 lakh consumers.

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The new tariff order is in the context of the COVID-19 pandemic, which has resulted in a very challenging time for the customers as well as for the discoms, the TPDDL spokesperson said, adding that a sharp drop in the sales to commercial and industrial customers has "deeply impacted" the discoms' finances in the last five months.

"The tariff declared by the DERC will result in an increase in the regulatory assets (the difference between the costs required to serve the customers and the revenue earned from the tariff), which was already at a precariously high level of about Rs 23,139 crore for all the discoms in Delhi as on March 2020," he said. An early liquidation of the regulatory assets (RA) is in the interest of all the stakeholders, including the consumers, as a high RA results in an increase in the tariff for them,he added. DERC Chairman Justice (retired) SS Chauhan said on Friday that the needs and demands of the discoms were considered "as far as possible" in deciding the new tariff.

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The TPDDL spokesperson said, "A high RA puts the reliable power supply in Delhi at a grave risk as financial institutions are extremely reluctant to fund the discoms as there is no clarity on the roadmap for liquidation of these assets." The company appealed to the DERC to take into account the "ground realities and challenges" in future orders to ensure that the discoms remain "financially viable" for ensuring round-the-clock power supply in Delhi.

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