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PM's dig at AAP? Why do parties promise free power, Modi asks

NEW DELHI: The newly formed AAP government ’s challenge in honouring the promise of a 50% cut in power tariffs for consumers could become even stiffer with the Delhi Electricity Regulatory Commission ( DERC ) likely to order a hike in the tariffs, by around 10%-15%, to be paid to discoms because their costs have increased.Last November, Delhiites were spared an increase in electricity costs when the DERC withdrew its order on power purchase adjustment charges (PPAC) a day after its announcement. However, that is likely to come back and hit city residents twice as hard, as the regulatory body will now be deciding on PPAC for six months. An order is expected later this month.Estimates are that the hike in tariff due to PPAC would be approximately 10%-15%. This apart, DERC also hinted that scrutiny of the tariff petitions of discoms for 2015-16 is underway and revised tariffs are likely to be announced by April. If DERC does grant an increase in tariffs, the subsidy amount that AAP would have to shell out to slash tariffs by the promised 50% would also increase substantially.“The current estimate on how much the AAP government would require to slash electricity tariffs is based on current rates. This works out to be around Rs 1,400-1,600 crore. But if the rates are revised, the subsidy will also increase. It’s going to be a challenge for the government to keep its promise of lower electricity tariffs,’’ said an expert.According to sources, apart from reinstatement of the withdrawn PPAC order of November, discoms BSES Rajdhani, BSES Yamuna and Tata Power Delhi have submitted a fresh petition last month asking for fuel charges for the period October-December, 2014. The November order that was withdrawn by the Commission was for the July-September quarter.“Discoms said they have submitted all fuel cost details, so we will have to examine it. We are also cross checking the data sent by discoms with NTPC to ensure there are no discrepancies. When the PPAC order was initially passed in November, we realized the power companies had not included bills and other details which is essential to verify their claims. Now we have two PPAC quarter claims to examine and hope to come to a decision soon,’’ said a DERC source.Discoms claim that getting no PPAC charges for the last few months had severely affected their cash flow. The discoms, particularly the BSES ones, have been hinting at financial troubles for the last several years. The BSES companies are in a worse shape with many power generation companies like SJVNL and now Damodar Valley Corporation regulating power supply to them due to non-payment of dues. The BSES discoms also owe Delhi government-owned institutions such as Transco, IPGCL and PPCL almost Rs 6,000 crore.The discoms are banking heavily on PPAC charges and a coming tariff hike to improve their financial situation. “We are in talks with several banks and financial institutions over our financial woes. But since we have not been getting cost-reflective tariffs for so many years, the situation is just getting worse. In such a situation, we need PPAC charges — due to us as per an apellate order — and tariffs based on current rates to help us out,” said a source in a discom.