The Hindu : Front Page : A brand new power tariff policy for Capital

Online edition of India's National Newspaper
Sunday, Jun 17, 2007
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A brand new power tariff policy for Capital

Staff Reporter

The Delhi Government has notified a new multi-year power tariff policy. Drafted by the Delhi Electricity Regulatory Commission, it is purportedly aimed at ensuring stability in power tariff structures by regulating them and checking their fluctuation beyond a certain bandwidth.

The new policy, which will be used to fix power charges from this financial year, will be applicable up to March 2011. The charges will be based on a four-year formula but the actual rates will be notified for a year at a time and these will be reviewed at the end of each year.

The annual aggregate revenue requirements (ARR) submitted by the power distribution companies will be scrutinised and changes will be carried out in the tariff plans. The new policy will address all three areas of generation, transmission and distribution and auditing will be carried out of each of these areas.

Sources in the Power Department said a proposal to allow the discoms to have different tariff rates has been mooted: "The rates will be similar, not the same... this would depend on various factors including reduction in losses and the rates at which the power is being procured."

The assured rate of return for the discoms has also been changed from the prevailing 16 per cent to 14 per cent and the new concept of time-of-day metering has also been given the go-ahead.

"There is also a proposal to have a single tariff for the Government departments as against the current multiple tariff policy," said sources.

The discoms have been asked to file their ARR within three months of the date of notification, following which DERC will decide the tariff structures for the discoms -- BSES Yamuna, Rajdhani, NDPL, New Delhi Municipal Council (NDMC) and Military Engineering Services.

The new policy framework will divide all costs into two broad categories -- controllable and non-controllable. Expenditures on administrative and general expenses, repair and maintenance will come under controllables while power purchase and rise in costs will come under non-controllables. Sources in the Power Department said unlike the current arrangement, where the discoms have a fixed return rate, they will now have to control their controllable costs.

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