The Hindu : New Delhi News : Move to sort out discoms’ depreciation charges

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Tuesday, Jan 15, 2008
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Move to sort out discoms’ depreciation charges

Smriti Kak Ramachandran

The discoms had moved the Supreme Court against the DERC’s decision
‘The Government is worried that these charges may get reflected in tariffs’

NEW DELHI: Delhi Chief Secretary Rakesh Mehta will shortly chair a meeting to sort out the longstanding issue involving payment of Rs.1,200 crore to the Capital’s power distribution companies as depreciation charges.

The discoms had moved the Supreme Court against the Delhi Electricity Regulatory Commission’s decision to reduce the depreciation rate level to 3.75 per cent as against the originally decided 6.69 per cent.

While the Government maintains that the meeting is being called to “settle pending matters”, sources said the Government wants the issue to be sorted out as any more delay in payment would mean flouting the Supreme Court’s direction. Mr. Mehta acknowledged that a meeting would be scheduled to discuss the issue. “The issue has been pending for some time and needs to be addressed. We need to take into account several aspects and so a meeting is in order,” he said.

Sources said the Government is also worried that these charges may get reflected in tariffs that will be announced soon and the impact an upward revision in tariffs would have on voters in an election year.

“The Government is worried that there could be a hike in power tariffs if these dues get reflected in the revised tariffs that will be fixed by the Delhi Electricity Regulatory Commission in the next few weeks,” a source said.

All the three discoms have sought recovery of the depreciation charges in the annual revenue requirement petitions filed before the DERC.

“It is a Catch-22 situation for the Government. A hike in power tariffs will mean alienating the consumers, but on the other hand the Government runs the risk of contempt of court,” the sources said.

For his part, Mr. Mehta said the Government wanted to compensate the discoms without putting any additional financial burden on the consumers. “The aggregate technical and commercial losses and the transmission and distribution losses have come down, from next year onward there will be more power generation in the city and the discoms will not have to buy expensive power,” he said.

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