Delhi likely to see hike in electricity rates from April 1 as govt prepares to clear discom dues

Electricity rates are set to increase across Delhi from next month as the government prepares to clear dues pending with power distribution companies. The Supreme Court had directed the administration to repay over Rs 38,000 crore to three private discoms over the next seven years. Recovery is likely to be made through an increased regulatory asset surcharge in electricity bills during this period.

According to a PTI report quoting officials, the Delhi government is likely to implement the hike from April 1. It reportedly plans to subsidise the change in power tariff to cushion the impact on the consumers. Regulatory assets —- costs that are expected to be recovered in future — have risen sharply over the past decade as the Aam Aadmi Party refused to implement any tariff hike.

The Delhi Electricity Regulatory Commission told the Appellate Tribunal for Electricity in January that total regulatory assets in Delhi now stands at Rs 38,552 crore. The original regulatory asset amounts have reportedly increased as interest piled up amid growing delay in recovery.

As per DERC filing, the outstanding amount includes Rs 19,174 crore for BRPL, Rs 12,333 crore for BYPL and Ra 7,046 crore for TPDDL. The amounts are approved expenditures incurred by the discoms for supplying electricity. The court also directed DERC to prepare a recovery plan, account for carrying costs (interest) and conduct a detailed audit explaining the prolonged delay in cost recovery.

Electricity bills to increase from April 1?

The  Delhi Electricity Regulatory Commission is set to increase the surcharge from April 1. The government is reportedly working on a plan to increase subsidies and absorb some of these costs. But the administration is yet to release an official notice about the matter.

Statements given by Delhi officials indicate the ‘free’ power scheme for people with consumption below 200 units is expected to continue. The hike will appear on electricity bills as a ‘regulatory asset surcharge’, and its final impact will depend on how much of the change is absorbed by the Delhi government.