Petition for approval of True-Up

The Secretary,

Delhi Electricity Regulatory Commission,

C-Block, Malviya Nagar,

New Delhi.

Sub: Public Notice on Request for public response for Petition for approval of True-Up for FY 2011-12, Review of FY 2012-13 and Aggregate Revenue Requirement and Tariff for FY 2013-14

Sir,

We the citizens are supposed to be the Eyes and Ears and the Regulators the Voice to Protect Consumer Rights. When electricity regulators were first set up in the early years of the last decade, they were seen as reform agents.

We the Petitioners on behalf of Power Consumers have a different take on DERCs functioning. We have reasons to believe that over time DERC has been consumed by the bane of the Indian System called Political Interference, DERC has been working for the un-holy nexus of the Government and Private Enterprises to fleece consumers and to give maximum profits to the Private DISCOMS.

The raising of tariffs, and that too in stiff doses over the past 18 months, points beyond the tariff hikes, the manner in which DERC has been taking Cues from Delhi Chief Minister’s Statements and throwing reasoned facts placed before it to the wind and increasing Tariffs on arbitrary figures put forth by DISCOMS, points towards corrosion in the regulator's functioning.

I substantiate my accusations and request you to treat this as a Positive Feedback to put the Regulatory Process back on track, lest this malaise puts a Permanent QUESTION MARK on their Credibility.

The Commission should issue directive within the parameters of Section 61 of the Electricity Act, 2003 which stipulates that the Commission shall be guided by the factors which would encourage competition, efficiency, economical usage of resources, grid performance and optimum investment in specifying the terms and conditions for determination of tariff. 

Therefore, please look up my earlier objections/suggestions dated 24-01-2009, 05-11-2009, 21-02-2010, 09-06-2011, 21-06-2011(two letters), 25-07-2011, 08-11-2011, 12-12-2011, 09-02-2012, 03-10-2012 our demand has been constant with no relief from DERC. To ensure proper accounting, audit and efficient performance to optimize resource use, the Commission should look into the following aspects:-

1. Ensure Transparent Power Purchase Mechanism: Power Purchase costs have been falling since 2009 onwards, Power is available for as low as Rs. 1.08. A few days back it was reported NORTH INDIA GETS MORE POWER FROM SASAN of which Delhi Quota is 447-MW @ Rs. 1.19/- per unit.

The Hon'ble LG of Delhi states in his address to the Vidhan Sabha on 13-03-2013 that Power gave a Profit of Rs. 30,000/- Crores. Earlier the Delhi Power Minister had stated that DISCOMS have not deposited Delhi's share of Tariffs collected. WHERE IS THE MONEY GOING?

The Act provides that the Appropriate Commission may fix the trading margin, if considered necessary. Though there is a need to promote trading in electricity for making the markets competitive, the Appropriate Commission should monitor the trading transactions continuously and ensure that the electricity traders do not indulge in profiteering in situation of power shortages. Fixing of trading margin should be resorted to for achieving this objective.

We have on numerous occasions asked DERC to get DISCOMS to place on the website every fortnight details of Power Purchased, like Quantity, Price, Source etc so that consumers can verify the prevailing competitive costs in the Market. Cartelization has to be stopped and purchases amongst sister concerns have to be discouraged.

2. Unbridled Over-PRIVISIONING must be capped: Today software’s can predict power consumption patterns with accuracy of +/- 3%. Despite over provisioning Delhi faces un-announced power cuts, so what purpose is over provisioning achieving, other than giving DISCOMS opportunity to indulge in Power Trade and Pocketing the Profits and Passing Losses to the Consumers. A scientific Audit/Study involving Consumption Patterns must be conducted to look into the prevailing situations and all these transactions be scrutinized for deals between sister concerns or Cartelization and cost/prices verified with the prevailing Rates in the Power Exchange.

3. Distribution Loss should be treated as Business Loss and not part of Tariff: POWER THEFT IS DISCOMS BUSINESS NECESSITY... how else will they hide the UNEARNED PROFITS from Residual Back Flow (25% to 40%) ..... and keeps their Political Masters Vote Banks happy with Free Stolen Power .... while the honest consumer is made to pay for the loss. Please make public how many Distribution Transformers are making Negative Loss ......

International standards for distribution loss is 3%. There is no incentive for DISCOMS to curb Theft as such losses are allowed to be offseted through Tariff, it also helps them get into clandestine commercial deals.

4. Stop Subsidizing the Power Guzzlers: The DISCOMS have to make Over Provisioning and buy Expensive Power because of Energy Guzzlers during Peak Loads. The cost of Over Provisioning should be passed on to only those who are in the first place responsible for excess drawl ie. those consuming over 1250 units per month ..... in the current system these high consumers are actually subsidised by the Prudent Consumer.

5. Credible Auditing Procedures: As electricity business comes under the preview of Electricity Act, 2003, the accounts pertaining to electricity are required to be prepared separately and got audited. The accounts of the licensee need to be prepared on commercial principles. DERC in its admission to Delhi High Court stated that they have no expertise in auditing the Voluminous Data provided by DISCOMS so how did they come to a precise figure of 21.83% tariff Hike in August 2011?

The petitioners on the other hand have in their possession Data that the three DISCOMS in Delhi are in Profits after paying taxes, NDPL- Rs. 351cr, BRPL Rajdhani - Rs. 187cr and Yamuna - Rs. 77cr (year 2009-10). In the absence of proper Auditing Guidelines DERC works on whatever is provided by DISCOMS and we all know how Private Auditors handle records, remember SATYAM.

When Private operators were handed over charge Delhi showed 65% T&D losses today that figure is 16% and falling ……. Not a single paisa of revenue gain has been passed on to the consumer. Instead in the past 10 years Huge Hikes have been allowed, to fleece the over burdened Middle Class.

In terms of the Section 61 (g) of the Act, the Appropriate Commission shall be guided by the objective that the tariff progressively reflects the efficient and prudent cost of supply of electricity. Now what Prudence have we seen in the above style of functioning?

6. Performance Standards: RWAs have been demanding strict Compliance in the Matching of Neutral to the Absolute Earth Potential as per relevant Act/Code. This alone is the main cause of Fluctuations and Spikes, resulting in damaging expensive household appliances like TV, Fridge, AC etc and unnecessary expenditure on Voltage Stabilizers. Performance Standards pertaining to Stable and uninterrupted 24X7 Power was one of the reason why Privatization was done. Consumers should be compensated for the losses due to Fluctuations and Spikes and be a part of Schedule I of Guaranteed Performance Standards. In the absence of any punitive provisions DISCOMS do not find it important to invest in such infrastructure.

Uninterrupted 24X7 Power Supply has remained a dream that was sold to bring in Private Players. Rampant power cuts are keeping the Inverter Industry alive and the consumer foots the bill for charging and maintaining inverters amounting to average Rs. 1200/- per month. Are these the Performance Standards that were envisaged in the Act to be in place on or before 2007? DISCOMS cannot be allowed to Charge Five Star and Serve Dhaba.

7. Conduct Energy Audit: Like Air and Water, Power too is essential for existence. This is not a luxury anymore and high use domestic consumers are already paying higher slab rates. Today citizens have to use power for basic living and also for Government's inefficiency. From motors to draw water to water purifiers ...... from inverters to voltage stabilizers ...... Mosquito repellents all point to unnecessary power consumption due to Govt. Apathy. Computers, Refrigerators, Televisions are as much a part of daily life as Air and Water and cannot be treated as luxuries.

The energy Audit should Revisit Public Service Entitlement Code, Babus went on an overdrive installing AC's in Govt. offices throwing the rule book on entitlement to the wind. Gone are the days when Rs. 20,000/- AC's were needed to protect Rs. 5 lac PC's. Today PC's are more robust and very cheap and do not require Air Conditioning to operate. Remove AC's from offices of those not entitled for the same. Why should consumers subsidise government officials' fancy life style? Who decides how much power is needed to keep the Govt. cold to people’s miseries?

The Energy Audit should also look into the Energy Guzzlers in Industry, Commercial Establishment, Street Lighting, Neon Signs, Hoardings etc. The industry and Commercial establishments recover the Energy Component from the consumer in the form of the Final Product Cost.

We see no reason that Energy Guzzlers like Government Departments, Hospitals (both Govt. and Private), Private Schools, Corporate Offices, Malls, Banquets, Farm Houses etc. be allowed to burden the Domestic Consumer by way of eating up the Cheap Power Quota Available from NTPC, SEBs etc.

Delink Power consumed by Domestic consumers and let Power Guzzlers buy power from open Market, right now there is no incentive for them to conserve energy as they recover their life style from the cost of their Product or Service.

8. End Monopoly: Open Access was to have been in place by the year 2009, it has remained a Pipe Dream even in Delhi, with Regulators and Government playing in the hands of Private Players.

What’s more the DERC is making some DISCOMSs permanent fixtures by investing in expensive exercise of Time of Day Metering System and asking these very Private Players to invest and put up equipment to measure Usage Patterns. Once such huge investments are made how will DERC ask them to make way for Open Access Policy.

9. Fuel Charge Adjustment: This is another head in which Lack of Transparency is working against the Consumers. What is the total component of Fuel Cost in the Production of Power? We believe it is not more than 15%, a little higher in case of inefficient Plants. How can DERC allow 2%,5% and 7% as Fuel Charge Adjustment ….. we know now for a Fact that Mr. Manmohan Singh Gifted Coal Blocks for free, we also know that DISCOMS have not been paying their Dues to NTPC and others for the power Purchased (the Govt. had to bail them out with our Rs. 500cr package), so where is the question of Fuel Cost Adjustment and that too, a hefty 50% increase for something they got for free. In a CERC meeting it was brought to light that NTPC has no scientific system of calculating fuel cost and the Power Producer ie NTPC itself decides how much should be the increased charge ..... ARBITRARY and protested by all DISCOMS.

10. Fast Running Electronic Meter: It has been noticed the residents are paying 25% to 40% higher bills. Experts have informed us that this is due to the Three Phase with Single Neutral Distribution Transformers, where in the Residual Back Flow gets recorded in the meter reading, therefore INFLATED BILLS

.

After three years of sustained efforts this issue was addressed by DERC by inserting an Ad. in news papers on 24th Dec. 2011, putting the onus of correcting the flaw on the consumer. The Supply Code clearly states that it is the Duty of the Service Provider to provide a separate Neutral up to the Metering Point. DERC tried to legalise this unearned Profit by excluding this provision for existing consumers of less than 10kw in the Draft Performance Standards ... SHAME.

The remedy lies in implementing Regulation 41 of CEA's Regulations of 2010, which are the statutes in replacement of IE Rules 1956 under section 53 read with 177 0f the IE Act 2003.

Multiple Neutral Earthing System (MNE) provides the solution under Rule 61 of the IE Rules-1956’ which, however, stand repealed with the notification of CEA Regulations -2010. Now regulation No: 41 of the regulations of CEA of 2010 stringently provides for multiple earthing of the ‘Neutral Conductor’. Therefore, implementation of regulation 41 of CEA provides the complete solution to this point being raised by Delhi Consumers ever since the electronic metering has been introduced and not addressed by DERC for reasons best known to them.

We demand an Audit/Field Survey by an Independent Institute of Repute involving the Petitioners, be conducted. Transformer wise Audit of Units supplied and billed for the past three years of Peak Load Periods in Winters and Summers. Excess billing if found should be refunded to the consumers and Punitive Penalty imposed on DISCOMS for breach of trust and willful fleecing of Consumers.

11. Abolish Fixed Charge: The Fixed charge on monthly basis is being levied and recovered from all consumers irrespective of how much Power they consume. We understand that certain fixed costs are involved in bringing electricity to our door step and if some people keep properties locked then a Minimum Charge should be levied. Earlier this was termed as Minimum Charge later very cleverly changed to Fixed Charge and has been increased from Rs. 8/- earlier to Rs.20/- now.

It is to be noted that a consumer is already paying a higher slab rate for higher consumption offsetting the need to charge on the basis of sanctioned load. A One Time Fee for higher load Meters, Wiring and a Security Deposit is already levied. Permitting the DISCOMS to charge Fixed Charge from every consumer on a monthly basis is nothing but charging the consumers twice under two different heads for the same thing.

These are preliminary submissions, I request you to give me an opportunity to elaborate in person before a final decision is taken.

Warm Regards,

Rajiv Kakria

Chairman, E-Block, GK-I RWA.