Delhi residents hoping for power tariff cut will instead pay 8% more

Delhi residents hoping for a huge cut in their power bills – one of the election promises of Arvind Kejriwal's Aam Admi Party – have found that there are no short-cuts through India's economic realities on the ground. On Friday the Delhi Electricity Regulatory Commission, which regulates the sector in the state, approved a 6-8 per cent surcharge on power purchase costs by electricity distribution companies or discoms.

The DERC notice said the surcharge was for a period of three months from today or until any further order.

Moreover, the city-state's three discoms – two of them controlled by Anil Ambani's Reliance Infrastructure – have warned of power cuts of up to 10 hours a day because they don't have funds to buy electricity from the national grid. This is in contrast to the situation under the previous Shiela Dikshit government, when Delhi's perennial power cuts had almost become a distant memory.

The DERC has approved a quarterly power purchase cost adjustment sought by the three power distribution companies for the October-December quarter. The hike is 8 per cent for areas fed by BSES Yamuna Power Ltd (BYPL), 6 per cent for BSES Rajdhani Power Ltd and 7 per cent for Tata Power Delhi Distribution Ltd; and would be reflected in bills for February-April.

The state government is of course furious, having promised a 50 per cent cut in electricity bills soon after coming into power. Chief minister Arvind Kejriwal accused BPYL of ''blackmail'' by threatening power cuts of up to 10 hours a day in central and east Delhi from today.

Warning of strict action, including cancellation of licences, he said, ''There are no reasons for power cuts. I want to give them a warning that if they try to create panic in future, the government will take strict action against them.''

The government also said the hike in surcharge could have waited as the Comptroller & Auditor General of India (CAG) audit of power distributors, as requested by the state, is still on.

Defending the surcharge hike, DERC said discoms were buying bulk power at higher rates and they had no option but to pass it on to the consumers.

The discoms welcomed the hike but said they needed more funds to clear their dues with the National Thermal Power Corporation (NTPC), which has threatened to curtail supply if they don't pay up. On Friday, NTPC rejected the government's request to give the discoms more time to pay their dues.

Delhi's daily power requirement peaks at about 6,000 MW (it varies seasonally) out of which 3,175MW is supplied by NTPC. Of this, 811MW goes to BYPL areas.

Holding out some hope, DERC chairman P D Sudhakar said, ''The power department has asked the Power Finance Corporation and others to help BYPL so it can make the payment. We have supported their move. We are confident the power cuts won't take place tomorrow (Saturday).''