1. In Arvind Kejriwal ruled Delhi, power generation cost doubles in 5 years

In Arvind Kejriwal ruled Delhi, power generation cost doubles in 5 years

Although the Delhi government has often blamed the city state’s higher power tariff on the three privately-owned power distribution companies (discoms), power manufacturing cost at its own generation companies has doubled in the last five years.

New Delhi | Published: March 29, 2017 6:57 AM
Discoms complain that electricity tariffs have not been revised in Delhi in the last two years despite rising costs of power purchase.

Although the Delhi government has often blamed the city state’s higher power tariff on the three privately-owned power distribution companies (discoms), power manufacturing cost at its own generation companies has doubled in the last five years, which has forced discoms to reduce their purchase from these plants, an audit report by the Comptroller and Auditor General (CAG) said. The report was tabled in Parliament recently. Power generation in Delhi is entrusted to Indraprastha Power Generation Company Limited (IPGCL) and Pragati Power Corporation Limited (PPCL). CAG said that from FY2012 to FY2016, the cost of generation at IPGCL more than doubled to R10.45/unit, while at PPCL, it increased from R3.05/unit to R6.00/unit. The hike in generation charges were mostly due to rise in variable costs. As the prices went higher, discoms of Delhi purchased less power from these two entities, the report said.

As on March 2016, the cumulative installed capacity of IPGCL and PPCL was 2,106.20 MW. Out of this, the 135 MW Rajghat Power House is a coal-based power plant while the rest are gas-based thermal power plants. Discoms complain that electricity tariffs have not been revised in Delhi in the last two years despite rising costs of power purchasing. This has added to the financial stress of such distribution companies, as about 85% of the revenue of discoms goes in purchasing power. Delhi’s bulk power rate, at around R5.34/unit, is more than 30% higher than the national average of R4.08/unit.

Electricity in Delhi is supplied by TPDDL and BSES, the power distribution units of Tata Power and Reliance Infrastructure respectively. Apart from higher prices, discoms have had to look for power elsewhere because the utilities were not able to generate the requisite power for Delhi. Shut downs and delays in repair and maintenance adversely effected the generation targets, plant load factor, plant availability and capacity utilisation of the power plants of the two utilities, the CAG report noted.

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According to the report, to meet peak demand in Delhi, power import from outside the state has increased from 4.5 GW in FY 2012 to FY 5.1 GW in FY 2016. IPGCL and PPCL are able to meet only a little more than 10% of the peak demand. The two utilities were able to generate only 25.7 billion units (BUs) of power from FY2012 to FY2016, against the target of 54.4 BUs, leaving a shortfall of 52.74%.

However, CAG also held the discoms partly responsible for the woes of IPGCL and PPCL. It said that discoms in Delhi owe R4,911 crores to these utilities, adversely affecting the financial position of the companies as they had to resort to short term borrowings to meet their day to day expenses. The management of IPGCL and PPCL stated that action against the discoms for default in payment dues was not initiated in the interest of consumers.

According to sources who are aware of the dynamics of power tariffs in Delhi, one of the reasons behind highers tariffs is the availability of better quality power in Delhi compared to other states. The state provides 99% assured power to its consumers. To maintain reliability, the PPAs are signed at 100% peak power. These factors, along with a few others, have a bearing on the determination of power tariffs.

By Anupam Chatterjee

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