The Delhi Electricity Regulatory Commission (DERC) has in a stern missive to the state government said the latter’s questioning of the quasi-judicial institution’s decisions has been “inappropriate and unfair”. Last month, the Delhi government had written to DERC chairman PD Sudhakar questioning the basis of the tariff revisions that resulted in steep hikes in prices to the consumer between 2011 and 2014.
Replying to the letter, the commission said: “… tariff fixation exercise is a complex one where the commission utilises multiple controls and prudent checks on various elements, including power purchase, capex entitlement and billing system.” The commission added that all stakeholders, including consumers and the government of Delhi, were free to question the tariff fixation by filing appeals before the Appellate Tribunal for Electricity (APTEL).
The Delhi government, pointing to the power rates on the power exchange for northern region that fell by 40% in the same period, had doubted the genuineness of the DERC’s tariff revision process. As per India Energy Exchange, the price of electricity traded in the day ahead market declined by 61% in 2009-14 to R2.80 per unit from R7.29 per unit.
The commission, however, refused to answer specific queries in the state government’s letter and said that such an exercise could have financial implications for all the concerned stakeholders. All such allegations must be put to the test of ‘trueness’ by an appropriate appeal to the relevant forum, the regulator said.
Senior Delhi discom officials, speaking on the condition of anonymity, told FE that comparing long-term power purchase agreement (PPA) rates with that of power exchange was flawed logic. Long-term PPAs are meant for ensuring round the clock power supply which can’t be ensured by depending on power exchange. While there may be cheaper power available on exchanges during non-peak hours, availability of power during peak hours is not guaranteed, the officials added.
Furthermore, the Delhi discoms argued that the power rates in the city could be brought down by supplanting PPAs with current providers, which run inefficient and expensive plants, and entering into PPAs with cheaper sources of power.