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Richi Verma,TNN | Feb 12, 2015
NEW DELHI: A day after AAP swept Delhi elections, the city’s power regulator, DERC, admitted tariff petitions of the three private discoms, setting the ball rolling for a hike in power rates within an estimated four months. As per sources, the discoms have sought hikes in the range of 15%-20% for the coming fiscal.
Giving a 50% subsidy to domestic consumers in the 0-400 units bracket was one of AAP’s big pre-poll promises. Experts say this would cost the new government around Rs 1,400-1,600 crore a year.
AAP will have to make provisions in its budget for the huge power subsidy it plans to give consumers. The government is at present incurring a cost of Rs 260 crore for subsidizing tariffs by around 30% in the first two slabs since August 11 last year, as per the LG’s directions. This subsidy, however, ends on March 31.
Last year when AAP formed the government, Kejriwal had said that out of the Rs 201 crore expense for the enhanced power subsidy, the government would pay Tata Power Delhi Rs 61 crore. The remaining Rs 140 crore owed to the two BSES discoms were planned to be offset against the Rs 4,000 crore the latter owed Delhi government.
This time, however, discoms are expected to point out that the subsidy amounts must be paid in advance, as per the Electricity Act. The power companies were unhappy with delays in the release of funds to them last year.
It’s also unlikely that the BSES discoms would agree to settling the subsidy amounts against their dues. The two Reliance discoms are in an acute financial crisis, particularly BSES Yamuna, and are regularly defaulting on payments.
“The BSES discoms have already said that unless tariffs are hiked, they will not be able to pay generators and blackouts could follow. Delhi faced long outages around this time last year after NTPC threatened to regulate supply to BSES after the two discoms defaulted on payments,” a source said.
Electricity tariffs in Delhi have always been a political subject. The Sheila Dikshit government used to give regular subsidies to the lower category of consumers. In December 2013, when AAP formed the government and Kejriwal became chief minister, he enhanced the already subsidized tariffs further to bring the lowest two slabs to 50% from January 1 to March 31 2014. However, Kejriwal quit office on February 14 last year and the subsidy expired by March end as no provisions had been made to extend it in the Delhi budget.
For the next several months, Delhiites paid full tariffs across all slabs. LG Najeeb Jung then approved a new power subsidy which came into effect from August 11. “Under the present subsidy, there is 30% subsidy for those who consume power till 200 units, and 15% subsidy for those who consume power till 400 units. The promise made by AAP, however, is that tariffs will be halved for everyone consuming up to 400 units,” said an official.