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  1. Aam Aadmi Party power tariff cut not so difficult; Delhi citizens paying a whopping Rs 3,700 cr extra

Aam Aadmi Party power tariff cut not so difficult; Delhi citizens paying a whopping Rs 3,700 cr extra

While Arvind Kejriwal's Aam Aadmi Party (AAP) promises sharp cuts of up to 50% in the power tariffs...

By: | Updated: February 7, 2015 7:41 AM
Aam Aadmi Party, Aam Aadmi Party news, Arvind Kejriwal

Aam Aadmi Party (AAP) leader Arvind Kejriwal on the election campaign trailfor the Delhi Assembly elections in New Delhi on Thursday. Express photo by Praveen Khanna

While various political parties like the Aam Aadmi Party (AAP) are promising sharp cuts of up to 50% in the power tariffs of certain segments of users, cutting tariffs is not too difficult if various government agencies get together. Close to a fifth of Delhi’s consumer tariffs are actually uncalled for. In terms of absolute numbers, that’s around Rs 3,700 crore.

An important caveat: Most of this is due to the actions of the central and Delhi governments and the regulator, and not so much the electricity distribution companies (discoms).

The maths is reasonably simple. Against an all-India average of Rs 3.85 in FY13, Delhi’s discoms paid Rs 4.84 for the power they purchased, mostly from government-owned generating firms. The AAP’s white paper on the capital’s electricity sector, in fact, cites the Sasan UMPP power tariff of Rs 1.20 per unit against NTPC’s supply costs of Rs 1.75-6.15 per unit and NHPC’s Rs 1.77-12.21 per unit. A difference of just under Rs 1 works out to an extra Rs 2,500 crore that Delhi’s consumers are paying on a regular basis.

One way to fix this is to free up the discoms from these old power purchase agreements and to supply Delhi with a captive coal mine for generating cheaper power.

power tariff, power tariff in Delhi, domestic power tariff in delhi, Aam Aadmi Party, Aam Aadmi Party news, aap power tariff, electricity distribution companies, discoms, Delhi discoms, NTPC,

Apart from the higher costs from coal-based power plants, an added problem is that gas-based power plants in the capital do not work at their rated capacities due to shortage of gas. On average, gas-based power plants work at around 25-30% of their capacity. Yet the discoms need to pay for this, and this sum works out to around Rs 900 crore or so, or 32 paise per unit. This is subsumed in Delhi’s higher average power purchase costs.

An equally large problem occurs due to what are called ‘regulatory assets’, or dues that needed to be paid to discoms but were not. Till FY13, these added up to Rs 13,700 crore. The regulator has allowed an 8% surcharge on the existing tariff to pay for the interest cost each year. This adds up to 48 paise per unit, but this does help repay the dues. A safe assumption is that this number will double if the debt has to be repaid, as it will have to.

Aam Aadmi Party, Aam Aadmi Party news, Arvind Kejriwal

Aam Aadmi Party convener Arvind Kejriwal with party leader Manish Sisodia during the release of the party manifesto for Delhi Assembly election 2015, in New Delhi on Saturday. PTI

A solution would be to start paying part of this back through the Delhi government budget each year, or to use the Centre’s power reforms funds to help clean up the backlog and to ensure that such build-ups are not allowed by the regulator in future.

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  1. Anas Choudhary
    Feb 6, 2015 at 2:00 pm
    Your vote for AAP is not just a vote..it is more than that It is an unsaid testimony to those 80 crore poor and downtrodden who do not see development..it is a testimony that you care for them. It is a testimony that you get hurt when people get betra on false promises. It is a testimony to those farmers who grow food for you but commit suicides in hunger and debt. It is a rejection of corruption and crimes. It is a rejection of hatred straightaway. it is an acceptance of communal harmony and forbearance. It is acceptance of free, sovereign, socialist,secular and democratic India..for which we have given innumerable lives and sacrifices. It is a vote for development Please vote for AAP
    Reply
    1. Anas Choudhary
      Feb 6, 2015 at 2:00 pm
      Your vote for AAP is not just a vote..it is more than that It is an unsaid testimony to those 80 crore poor and downtrodden who do not see development..it is a testimony that you care for them. It is a testimony that you get hurt when people get betra on false promises. It is a testimony to those farmers who grow food for you but commit suicides in hunger and debt. It is a rejection of corruption and crimes. It is a rejection of hatred straightaway. it is an acceptance of communal harmony and forbearance. It is acceptance of free, sovereign, socialist,secular and democratic India..for which we have given innumerable lives and sacrifices. It is a vote for development Please vote for AAP
      Reply
      1. S
        Secular Indian
        Feb 6, 2015 at 2:38 pm
        AAP is the ONLY hope remaining for poor and middle cl. The EMPTY SLOGANS of Modi and his team stands exposed. Make in India slogan was blown away..when he was wearing Rs 10 Lakhs suit made in Holland !!!!!!!!!!! Hypocrites like Feku, amit are bane for Indian Middle cl and Downtrodden.
        Reply
        1. R
          Ramkumar
          Feb 6, 2015 at 4:04 pm
          AAP says gas and coal supply should be there with cheap rates, my question is how? They contradict and create hurdles in every step for acquiring cheap coal and gas. As per AAP coal mines should not be auctioned to private parties, it should be only PSUs like Coal India..etc, which are highly inefficient organizations and also give high compensation to villages for rehabilitation with jobs in mining companies. In my view we should allow private parties with latest technologies for mining and purchase the coal from open market either from Indian organization or Australia..etc. Rehabilitate villagers in other areas where they contribute with their skills. Are we educated citizen not migrating from our own forefathers place for jobs, then why not the villagers too. AAP want RIL to extract the gas and distribute to the power plants, PSU fertilizers companies..etc very cheap then open market price. How can any company survive without having around 20% profit margin? It may be RIL, CRAIN, S..etc Govt. should allow them to have 15-20% profit margin. We Indians want everything cheap, so in turn want Govt. bare our cost and make ourself lazy and no innovation for improving the production process. Come on India wakeup, we need to work hard like anese & Koreans to make ourself valuable skilled resources in the world. This the time to work hard and elect right leader who don’t promise free bees and have vision to make India as manufacturing and high skill hub , don’t go with temporary reliefs and falls promises. In case of farmers when Govt. approach for land accusation for industrial hubs, they say it is fertile land and show up as they are making huge money from farming, so need very very high compensation. But on ground they can’t get their minimum basic needs and commit suicides. If you are able to earn much from farming it is better to develop skills in manufacturing and get job in any industry. India need more manufacturing industries to employ more unemplo citizens and also those farmers who can’t produce much for their own survival. Her also AAP representatives like Megha Patkar ..etc create hurdles in country progress. We need food for that we need to invest in technology like Israel more productivity per sq. mtr., for that we need private organization to invest in research and development. Overall AAP is not the right party, they are preachers and implementers. Preaching is very easy then implementing, think twice before voting.
          Reply
          1. R
            Ramkumar
            Feb 6, 2015 at 4:03 pm
            AAP says gas and coal supply should be there with cheap rates, my question is how? They contradict and create hurdles in every step for acquiring cheap coal and gas. As per AAP coal mines should not be auctioned to private parties, it should be only PSUs like Coal India..etc, which are highly inefficient organizations and also give high compensation to villages for rehabilitation with jobs in mining companies. In my view we should allow private parties with latest technologies for mining and purchase the coal from open market either from Indian organization or Australia..etc. Rehabilitate villagers in other areas where they contribute with their skills. Are we educated citizen not migrating from our own forefathers place for jobs, then why not the villagers too. AAP want RIL to extract the gas and distribute to the power plants, PSU fertilizers companies..etc very cheap then open market price. How can any company survive without having around 20% profit margin? It may be RIL, CRAIN, S..etc Govt. should allow them to have 15-20% profit margin. We Indians want everything cheap, so in turn want Govt. bare our cost and make ourself lazy and no innovation for improving the production process. Come on India wakeup, we need to work hard like anese & Koreans to make ourself valuable skilled resources in the world. This the time to work hard and elect right leader who don’t promise free bees and have vision to make India as manufacturing and high skill hub , don’t go with temporary reliefs and falls promises. In case of farmers when Govt. approach for land accusation for industrial hubs, they say it is fertile land and show up as they are making huge money from farming, so need very very high compensation. But on ground they can’t get their minimum basic needs and commit suicides. If you are able to earn much from farming it is better to develop skills in manufacturing and get job in any industry. India need more manufacturing industries to employ more unemplo citizens and also those farmers who can’t produce much for their own survival. Her also AAP representatives like Megha Patkar ..etc create hurdles in country progress. We need food for that we need to invest in technology like Israel more productivity per sq. mtr., for that we need private organization to invest in research and development. Overall AAP is not the right party, they are preachers and implementers. Preaching is very easy then implementing, think twice before voting.
            Reply
            1. R
              Rahul
              Feb 6, 2015 at 3:06 pm
              If we ara thinking has gone so low that we just beleive that Mr. Modi is waering 10 Lacs suit then God will help our thinking. Modi is the only man as of now who can take India Out of this situation. We are Indians are too short sighted we want everything to be done in quick time, he does not have majic wand that every thing will go right. He has got vision. Apart from Modi who will run Rahul, Mayawati, Lalu, Jaylalita ( Big joke), so guys please help country by Healping Mr. Modi whose Image is Charismatic.
              Reply
              1. Ravi Mittal
                Feb 6, 2015 at 7:13 am
                I am not sure how the government is trying to offer electricity at a cheaper rate, wouldnt the burden come on to the tax payer eventually? What is long term plan?
                Reply
                1. Ravi Mittal
                  Feb 6, 2015 at 7:13 am
                  I am not sure how the government is trying to offer electricity at a cheaper rate, wouldnt the burden come on to the tax payer eventually? What is long term plan?
                  Reply
                  1. sanjeev singh
                    Feb 6, 2015 at 2:02 pm
                    AAPtard
                    Reply
                    1. S
                      Sam
                      Feb 17, 2015 at 11:03 am
                      subsidy offered till audit completes not for eternity.
                      Reply
                      1. J
                        JR
                        Feb 6, 2015 at 1:20 pm
                        AAP is a moron group... they do not realize how economy work,,, u can not keep on promising until there is a solid plan for growth... even modi is also not focusing on agriculture and food supply chain issue.. India need to work on these first..
                        Reply
                        1. w
                          win_vinay
                          Feb 6, 2015 at 2:16 pm
                          shankhnaad net / index.php / india / politics / item / 41-art-148 removes spaces and check out and put a dot between shankhnaad and net Also give me one reason to vote for AAP A 2 year old party claiming a new type of politics have fielded 41 crorepatis and 23 candidates with criminal cases. A party which publishes on their website that it has received 15 crores for this election already spent 105 crores on dings and radio ads from past 3-4 months. Promotion of AAP by media will continue till 10th Feb
                          Reply
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