10 Reasons why there should be no Power Tariff Hike


Rajiv Kakria


Wish we had known of DERC’s leanings towards Wholesale Price Index (WPI), a concept not recognised under Electricity Acts since 1910, we could have presented our objections and suggestions in terms they preferred. We foolishly based our arguments on Logical, Technical, Legal and Criminal grounds……. while all they understand is Inflation and WPI. Its time DERC should shift its Office to Azadpur Mandi or Kharibaoli …… it will be simpler and cheaper to get WPI data, than to conduct farce Public Hearings.

1. We want CAG Audit:
Honest consumers want to strike a balance between Industry growth and Consumer’s interest and have no problem paying Fair Value for the Power they consume. The Question is who and how Fair value is determined? DISCOMS present voluminous reports listing actual, dubious and intended expenditures, cleverly cooking up losses due to theft, under recoveries etc. that are difficult for DERC or common man to understand. The RWAs / NGOs presented their case in Public Hearings after studying accounts and replies filed by DISCOMS ……. former Chairman Mr. Brijender Singh agreed with the findings of the social groups and ordered a 25% decrease in Tariffs last year …. Delhi Govt. was quick to stall it. This year another Chairman came to a different conclusion citing Wholesale Price Index as the reason for a 22% increase …… giving no weightage to the facts and figures showing Rs. 3577/- surpulous funds in the accounts submited by DISCOMS. DERC has admitted in Court that they have no way of Auditing the Voluminous Accounts submitted by DISCOMS, claiming only CAG can do that. Then how DERC can determine tariff is any body’s guess.

2. Transmission & Distribution Loses (Theft & Dacoity):
When the DISCOMS took charge there was 65% average T&D loss reported and a promise was held out that power tariff shall start reducing after 5 years and promised to bring Power Tariffs down by curbing theft. Nine years on the average loss is down to 15% and and the consumers did not get any relief by way of proportionate reduced tariffs. Who has pocketed all the money generated due to 50% reduction in Theft. Why are there still some areas reporting 70% losses? Who is protecting them? We suspect, DISCOMS are not interested in curbing theft as it is their business necessity. Thefts come in handy to hide bulk side deals and to please Political Masters to cultivate vote banks. Honest consumers are being milked through Fast Running Meters and street lights are kept on during day time to feed side deals.

3. Dismal Performance Standards:
At the time of handover, the DISCOMS had promised qulitative uninterupted 24X7 Power Supply, within two years of operation. Nine years on the inverter / generator industry is thriving and the consumer is forced to invest in these space consuming implements that are unfriendly to the environment. Consumers spend on an average Rs. 1250/- a month to charge and maintain them. Expensive equipments like ACs, Computers, LCD TVs, Home Theaters go bust due to sudden spikes in voltage, if Stabilizers and UPS are not installed …. and they too consume Power. Only World Class City Delhi has this priveledge. Spikes in voltage also make the meters jump a unit or two.

4. Abolish Fixed Charge:
A monthly Fixed Charge on the basis of Sanctioned Load is being levied and recovered from all consumers irrespective of how much Power they consume. Earlier Delhi Vidyut Board (DVB) used to levy Minimum Charges, having taken a one time Security Deposit and other charges on the basis of Sanctioned Load. After privatisation the Government and DERC very cleverly converted this Minimum Charge to Fixed Charge, resulting in windfall profits to the DISCOMS. Levying Fixed Charge on a monthly basis is nothing but charging the consumers twice under two different heads for the same thing month after month. In fact Fixed Charge has the highest percentage impact on lower consumption.

5. Why Reward Ineffeciency and Govt. Apathy:
Every consumer is today burning Power for basic services that the Govt. has to provide and charges for. Residents are forced to install power guzzling motors to draw water online and another motor to pump water to overhead tanks. This water has to be further purified by expensive machines which operate on power. During peak summer months, the impact is manifold, greater water consumption means longer hours of running motors, therefore DISCOMS, already hard pressed on peak load demand, have to buy additional/avoidable expensive power in open exchange. Like inverters it is estimated that motors alone use up 200 units of power per month per household. If DJB does its job effeciently, there will be no need to buy extra power saving money and resourses.

6. DISCOMS poor Business Decisions:

Why are DISCOMS still buying from outside, that too very expensive and of questionable quality. Not setting up power plants in time, was their business decision. And why did they not opt for alternate hydel technology in Himalayas instead of setting up Gas based plants near Delhi? They talk of Gas being environment friendly …… what about the transportation of Gas adding to cost and pollution. They could have chosen Jharkhand where coal is in abandance and disposing of Fly Ash to fill excavated mines …… but how else would they have got expensive land closer to Delhi for a pittance. And what stops them from getting into long term Power Purchase Agreements, their by offsetting the inflanationary trends.

7. End Monopoly:
At the time of Privatisation dreams were sold to the people that by 2005, just as in case of Mobile phones, consumers will be able to choose their supplier. The benovolent Government and DERC did not see it proper to bring about competition and DISCOMS knowing the people have nowhere to go, used falsehoods like “NTPC will stop supply of power if demands are not met as they are unable to clear their dues”. Competition would have kept them honest/transparent, just as in case of Mobile Companies bringing down the call rates from Rs. 32/- to 32 paise per min. Can the Capital city depend on a supplier who is so much in debt and lacks credit for even two days of Power Supply???

8. One City – One Power Tariff:
NDMC supplies power @ Rs. 1.80/- per unit then how come DISCOMS who were brought in to supply Cheaper, Uninterrupted, Clean Power is asking for Tariff increase and seeks to be Subsidised for a purely Business venture. NDMC gets cheap power and sells to Commercial establishments at huge profits. Power Purchased for domestic use by DISCOMS and NDMC should be at the same cost and in direct proportion to their requirement based on the Load they supply. NDMC should not be allowed to sell power in the open market, instead surrender it to DISCOMS for domestic consumers outside Lutyens Delhi.

9. White Paper on Inventry, Assets & Salaries:
It has been nine years since DISCOMS have been in operation and to date the value of Inventry ie Transformmers, Cables, Wires, Equipment etc. has not been established. Nor, has it been established as to how much office space is needed and all extra prime office space should be restored to the public. DISCOMS are reporting huge outflows in staff salaries that far exceeed industry standards, nor are they linked to Performance. No one knows the cost of distribution of 1MW in India.

10. Fast Running Meters:
Although tariffs have not been raised in the past 5 years, it has been noticed the residents are paying 25% to 40% higher bills. It has been noticed that even those who are using the same number of appliances are getting higher bills. Experts have informed us that this is due to im-balance in the Three Phase with Single Neutral system, wherein the ‘Residual Back Flow’ gets recorded in the meter reading. The earlier Mechanical Meters did not have the Neutral wire connected to the Meters Recording Mechanism, where as these Electronic Meters have the Neutral attached to the meters Recording Mechanism, which results in recording the Residual Back Flow, therefore INFLATED BILLS. Field Testing and Field surveyes by an Independent Institute of Repute and Civil Society members should be ordered as promised by DERC in the Public Hearing held on 4th Aug. 2011. An Audit should also be conducted transformer wise on Units supplied and billed for the past three years of Peak Load Periods in Winters and Summers.

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