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PAC lashes out at DERC

Staff Reporter

It has lost autonomy and credibility, says panel headed by senior Congress MLA S.C. Vats

NEW DELHI: The Public Accounts Committee report on privatisation of power tabled in the Delhi Assembly last week has raised serious questions about the actions and role of the Delhi Electricity Regulatory Commission (DERC) stating that it had lost its independence, autonomy and credibility over a period of time.

Questioning the role of the Commission, the PAC headed by Congress MLA, S.C. Vats, states that rather than safeguarding the interest of consumers at large it has acted as a hidden hand of the Government and power distribution companies. Referring to the issue of rebate, the PAC stated that in spite of the fact that the discoms had claimed excess rebate in violation of the Bulk Supply Agreement, no penalty, interest or late payment surcharge was allowed to be collected from them. Instead it ordered that Transco would have to pay penal interest if it does not calculate the rebate due to each discoms and make the payment within a day. Interestingly, this issue was not before DERC at all.

It said the Standing Committee of Parliament on Energy had also passed severe strictures against the working of DERC and discoms. The functioning of DERC should be strengthened and made more transparent so that it is able to function effectively as a watchdog of the interest of the consumers. Excess rebate was being calculated and deducted by the discoms resulting in short payment of bills despite the fact that it was specifically stipulated in clause 5.2(d) that the discoms will pay the full amount to Transco without deduction, set off or withholding on any account whatsoever unless otherwise agreed upon. The discoms will be required to pay a Late Payment Surcharge at a rate equal to 2.5 per cent per month on the amount delayed.

On the Voluntary Retirement Scheme (VRS) offered by the three discoms, the PAC report states that the VRS was neither mentioned in the tri-partite agreement with the employees of the erstwhile Delhi Vidyut Board nor in the agreements with the discoms. These were introduced by the discoms on their own. As per the agreement, the discoms would be allowed to include the expense on this account in their revenue requirement. The justification given was that this would reduce recurring cost and increase efficiency. This means that the expense on account of VRS would be indirectly borne by the consumers in the form of increased tariff. Similarly, in the absence of any barrier on the salary package of the executive or non-executives of the discoms, how could it be assured that recurring cost would reduce in future? There is nothing to stop the discoms from giving its executives more salary and benefits and then claiming it as an expense of its Annual Revenue Requirement. "This is yet another example of the Government acceding to the whims of the discoms at the cost of the consumer," it concludes.

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