Wednesday, July 12, 2017

Objections DERC: Renegotiate DISCOM’s Contract to Check REGULATORY ASSETS

The Secretary,
Delhi Electricity Regulatory Commission,
C-Block, Malviya Nagar, New Delhi.Sub: Petitions for True Up of expenses for FY 2014-2015 & FY 2015-2016 and Aggregate Revenue Requirement and Tariff for FY 2017-2018 filed by the utilities of Delhi


If Long Term Power Purchase Agreements Can Be Renegotiated, WHY NOT the terms of contract guaranteeing 16% RETURN ON INVESTMENT to DISCOMS ????? that too for capital raised from Public Institutions at far lower rate of interest …… A SENIOR CITIZEN GETS 7% IN A FIXED DEPOSIT.

EXAMPLE – Noida Toll Bridge contract was the Brain Child of a similar set of people and borrowed its Content from the DISCOM Contract with Delhi Government. NBTL invested Rs. 200 Cr, has collected Rs. 450 Cr in Toll Tax and still claim a Loss of Rs. 850 Cr approximately.

Supreme Court has ordered a Ban on Charging Toll Tax on DND Flyway on a Petition filed by Citizen Groups ……. WE EXPECT DERC TO ACT ON BEHALF OF CITIZENS ……. As mandated in 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. 


THANK YOU FOR THIS OPPORTUNITY AFTER A LEAP YEAR ……. THIS YEAR I AM SEEKING ANSWERS TO 8 QUESTIONS FROM DERC,the answers for which I have been seeking for many years. Please read all my past Objections in your records and make them part of this year’s Objections as well.

1. REGULATORY ASSETS – 8% Surcharge was introduced in 2012 to eliminate Regulatory Assets.

a) COAL and GAS -  prices have been coming down steadily for the past three years, but we see no softening of strain on Regulatory Assets.

b) POWER PURCHASE COSTS - have come down and the 8% Surcharge is charged on Retail Cost that has remained unchanged.

c) DEFAULT OF TRANSCO DUES - DISCOMS have not cleared their dues to TRANSCO’s and threaten Blackouts.

d) BAIL OUT PACKAGE - Regulatory assets have continued to mount despite 500 Cr Bailout.

2. CAG AUDIT – citizens are paying a heavy price for the CAG Audit being stuck in Supreme Court. DERC should intervene and ask for early resolution as DISCOMS are profiteering at the expense of hapless citizens.

3. PRUDENCE CHECK – seems to be the least of DERC’s concerns as we have been demanding for many years. The process of appointing an Institution has been advertised but no concrete action taken.

4. Private DISCOMS - were brought in to Delhi in 2002 to bring Private Investment (Money), Efficiency, Curb Power Theft and Reduce Tariffs ……. in place of a Bleeding, Inefficient and Theft Prone DVB.

Private DISCOMS have failed on all four counts .....

a) PRIVATE CAPITAL -  this is the biggest fraud on the citizens, instead of bringing Private Capital, they took the Sovereign Guarantee of the Delhi Government Contract and raised money from Public Sector Financial Institutions, on top of that, DISCOMS were Guaranteed 16% ROI, so WHY IS DERC ALLOWING THE INTEREST ON LOAN TO BE ADJUSTED IN TARIFF.

b) REDUCE TARIFFS – Tariffs have increased manifold, including enhancement of Fixed Charge, which used to be Minimum Charges and adjusted in the bill amount exceeded minimum charge.

c) EFFICIENCY- No doubt it has improved but not to the extent promised, we still have long power cuts and have to depend on inverters; DISCOMS were supposed to take all transmission cables underground.

d) THEFT CONTROL - although the Average Power Theft is down to 15% from 60%, a third of Delhi is still showing over 65% to 98% theft, no BENEFIT TO HONEST CUSTOMER as Promised.

5. Fast Running Electronic Meter: Please refer to my Petitions from 2009 onwards, I have constantly asked for 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.

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.

PLEASE REPLY IN YES OR NO whether the Electronic Meters have been installed as per 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.

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.

6. BILL PAYMENT AT PSU BANKS: Power Bills should be collected at PSU Banks, that will bring transparency & Accountability of DISCOM dealings as money collected due to fast running meters gets concealed on account of recording Unutilised Current in Common Neutral due to RESIDUAL BACK FLOW. Delhi Government had written a letter to DERC in 2016 and was also reported in The Hindu.

7. END MONOPOLY - Both Mr. Modi and Mr. Kejriwal had Promised Delhites during Election Speeches that to curb the Profiteering DISCOMS they will END MONOPOLY and bring in Competition, as in case of Mobile Phones, therefore High Tariffs will be tamed.

8. Conduct Energy Audit: Ensure Metering of Self Consumption by DISCOMS and Government ……

Like Air and Water, Power too is essential for existence and scarce resource needs to be conserved. The Energy Audit should identify what percentage of Power is being consumed for Domestic use, Industrial / Commercial use, Public Utilities and Government office Buildings and how much Power is being consumed by bureaucrats in Lutyens Delhi and at what price.

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.

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
Member GK-I, RWA

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