Open Letter to Delhi CM Arvind Kejriwal – What is going wrong in terms of Electricity !

6th June, 2016

Mr Arvind Kejriwal,

CM Delhi

Subject : ELECTRICITY, DERC, DISCOMs :

Dear Sir,

Our system has forced us to bear the Monopolistic practices of DISCOMs, as we don’t have any choice. We are forced to have a connection only from a specific service provider, at any RATE ( power tariff & regulatory assets ) they want, at any QUALITY ( fluctuations & low voltages ) they offer and at any QUANTITY ( outages ) they could give to the consumers and that too, in the absence of any CAG or RTI.

Please go through the Electricity Act as below and see, at how many places it talks about the competition as well promotion of competition :

http://www.cercind.gov.in/Act-with-amendment.pdf

THE ELECTRICITY ACT, 2003 [No.36 of 2003] [26th May, 2003] An Act to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto.

Section 23. (Directions to licensees): If the Appropriate Commission is of the opinion that it is necessary or expedient so to do for maintaining the efficient supply, securing the equitable distribution of electricity and promoting competition, it may, byorder, provide for regulating supply, distribution, consumption or use thereof.

Section 60. (Market domination): The Appropriate Commission may issue such directions as it considers appropriate to a licensee or a generating company if such licensee or generating company enters into any agreement or abuses its dominant position or enters into a combination which is likely to cause or causes an adverse effect on competition in electricity industry.

Section 61. ( Tariff Regulations ) : (c) the factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments;

Section 62. (Determination of tariff): Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.

Section 79. (Functions of Central Commission): 2 (ii) promotion of competition, efficiency and economy in activities of the electricity industry;

Section 86. (Functions of State Commission): 2 (i) promotion of competition, efficiency and economy in activities of the electricity industry;

Section 131. (Vesting of property of Board in State Government): (5) A transfer scheme under this section may- (a) provide for the formation of subsidiaries, joint venture companies or other schemes of division, amalgamation, merger, reconstruction or arrangements which shall promote the profitability and viability of the resulting entity, ensure economic efficiency, encourage competition and protect consumer interests;

But in reality, there is no competition at all. The truth is that, our system has forced us to bear the Monopolistic practices of DISCOMs, as we don’t have any choice. We are forced to have a connection only from a specific service provider, at any RATE they want, at any QUALITY  they offer and at any QUANTITY they could give to the consumers and that too, in the absence of any CAG or RTI.

May i request you to please look into the above issue & do the needful for the benefit of Delhiites ?

With Best regards,

B S Vohra

Social Activist

www.RWABhagidari.com

Charging up a poll battle

Delhi BJP promises to transform power billing in its poll manifesto; a closer look reveals a more complex issue.

Electricity rates have become a political issue in the run-up to the elections in Delhi, with the Opposition focus on it, in the hope this would lead to the rout of the Sheila Dikshit-led Congress government.

The previous increase was in July, when rates were raised by five per cent. The Bharatiya Janata Party (BJP) has accused her of "conniving" with electricity distributing companies (discoms). Yet, the Delhi government has maintained the rates here are as cheap as it gets. (POWER POLITICS)

BJP formula

The BJP says it has a "10-point formula", which the party claims will reduce power prices in Delhi by 30 per cent. The party has, however, not stated any time frame for this.

The strategy includes bringing "transparency" in the working of the discoms, by ordering a study by the Comptroller and Auditor General of India, curtailing "unnecessary" power purchases that will lead to reduction of Rs 2 a unit, more autonomy to the Delhi Electricity Regulatory Commission (DERC) by appointing "competent" people, controlling power thefts and conducting an energy audit. However, the BJP's primary argument is that discoms in Delhi have "monopolised" power. And, the solution is introducing open-access.

The system of open-access allows customers to make a choice among different discoms. It was a primary objective of the Electricity Act, 2003, which had envisaged open-access as a system to introduce competition in the sector. Although the facilitative framework was created by the Central Electricity Regulatory Commission, started the system at the inter-state level, no state has provided the option to ordinary customers.

On ground

At present, this is only available in Mumbai, where customers can choose between Reliance Infra and Tata Power. Here, unlike in Delhi, the power rates between the two discoms significantly vary. According to data from the Central Electricity Authority, for the first 200 units, while Tata Power supplies at Rs 2.48 a unit, Reliance Energy is charging Rs 5.34. A study by Prayaas Energy Group, a Pune-based body, says until June 2011, about 160,000 customers (including 83,000 domestic ones) migrated from Reliance to Tata.

Can open-access work in Delhi, too? According to P D Sudhakar, chairman of DERC, this is unlikely. "The Tatas are able to sell cheaper power in Mumbai because they have their power generating plant, which ensures an advantage," he says. He says open-access is available in Delhi for bulk customers (1 Mw and above) but most customers have not migrated.

Debasish Mishra, senior director at Deloitte Touche Tohmatsu, also doubts whether open-access will lead to any significant reduction in prices. "Power tariffs (rates) can be reduced by bringing down power purchase cost and making efficiency gains through reduction in distribution losses," says Mishra.

The cost of power generation has been rising in the country. Companies argue the cost of generation has followed the curve along the rise in prices of coal and gas. In Delhi, 90 per cent of the power is sourced through thermal power stations. Of the thermal stations, 68 per cent are coal-based and the rest are gas-fired.

Purchase

Another key part of the BJP's professed strategy is "curtailing unnecessary purchase of power", to lead to a reduction in price by Rs 2 a unit. The party says "power companies buy electricity more than the requirement of Delhi. As a result, customers pay an additional Rs 2 per unit".

The Delhi government retorts that more power is bought to meet peak demand. An inter-city comparison by Prayaas Energy Group shows this demand in Delhi is much more than in any other city. Delhi's peak demand is around 5,000 Mw, about 57 per cent more than Mumbai's, the second highest. Further, Delhi has a non-uniform demand, with large variations between peak and minimum demand.

Shakti Sinha, a former power secretary to the Delhi government, doubts whether the BJP will be able to cut on the amount of power purchase. "Since Delhi has unique power peaks, the government is forced to buy extra power. If you don't do that, then load shedding will occur. Power companies don't supply at will; extra power is, therefore, needed," he said.

Comparisons

An analysis of the March 2013 report of the Central Electricity Authority (CEA) for the first 200 units of domestic power consumed shows power rates in Delhi are neither too cheap nor very expensive. Mumbai (Tata Power), Chennai and Ahmedabad have lower rates. However, Delhi supplies cheaper power than its neighbouring states of Uttar Pradesh, Haryana, Punjab and Rajasthan. The analysis, however, does not take into account the individual subsidies that states provide.

At present, Delhi has five power discoms. In 2002, the Delhi Vidyut Board was unbundled by the government, citing mounting losses. Private companies were provided licences to distribute power. The northern and north-western parts are supplied by Tata Power Delhi Distribution Limited (TPDDL), a joint venture between Tata Power and the government of Delhi, with the former holding 51 per cent. The rest of the capital, excluding the New Delhi Municipal Council areas and those in the Delhi Cantonment, are supplied by BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd.

BSES is owned by the Reliance Anil Dhirubhai Ambani Group.

According to the Delhi Economic Survey (2013-14), since private discoms were introduced in 2002, the transmission and distribution losses have been brought down from 60 per cent then to 17 per cent now. The fall has come even as consumption has increased from around 20,000 units to 25,300 units.

However, a comparison with other metropolitan cities shows the Delhi discoms can be more efficient. They're less efficient than in Bangalore, Chennai, Hyderabad, Kolkata and Mumbai.

Comparing the March 2012 rates with those of March 2013 reveals prices have increased by 24 per cent in Delhi. In the same period, those in Tripura rose 91 per cent, in Maharashtra by 52 per cent, in West Bengal by 35 per cent and in Kerala by 34 per cent. However, the increase was much less in Mumbai (Tata Power), Gujarat, Bangalore and Kolkata.

On the other hand, rates decreased in Tamil Nadu (five per cent), Ahmedabad (2.2 per cent) and Uttar Pradesh (0.95 per cent) during the period.

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POWER POLITICS

BJP'S FORMULA/STATUS

Introduce the system of open access, which allows customers to have a choice among discoms

• At present, open access is available only in Mumbai
• Implementation of open access will not be instant, as issues such as wheeling charges, switchover surcharge and cross-subsidy will need to be sorted

Order CAG audit of discoms

• At present, CAG doesn't audit private discoms
• Delhi High Court is hearing a petition to allow the CAG to audit discoms. In court, Derc has supported the need for CAG's audit

Curtailing unnecessary purchase of power

• Of all the metropolises, Delhi is the biggest buyer of power. The government argues not doing so will lead to scheduled power cuts

Appointing 'competent people' on Derc

• The BJP has not defined "competent people". At present, Derc has a retired bureaucrat as its chairman, and two members who are experienced engineers

Discoms to be brought under RTI Act

• Delhi High Court is also hearing a petition on bringing private discoms under RTI. Derc also wants Discoms under RTI

Power purchase agreements to be made public

• Power purchase agreements signed between power generators and discoms are not available in public domain

Providing separate neutral line to each customer

• Derc has written to discoms to ensure each meter has a separate neutral line. Consumers have complained to Derc that in houses with common neutral lines, meter readings were not correct

with thanks : Business Standard : LINK

Pay up or shutdown: Power companies threaten Capital with black out on Independence Day over unpaid dues

The National Capital may wake up to a blackout on Independence Day as two power generation companies (gencos) - Pragati Power Corporation Limited (PPCL) and Indraprastha Power Generation Company Limited (IPGCL) - have threatened a shutdown if their dues, running into thousands of crores of rupees, are not cleared by August 15. 

A senior power department official said there is a heavy backlog of outstanding dues against BSES on account of nonpayment of dues, which have accumulated over the years. 

Threat: PPCL and IPGCL have written to the Delhi government that they will be bound to stop power generation from August 15 on account of heavy outstanding dues against power distribution company BSES "Total dues is Rs 3,400 crore. Out of this Rs 2,700 crore is due towards gencos - PPCL and IPGCL. Moreover, the discom owes Rs 700 crore to the Delhi Transco Ltd," said the official. 

BSES authorities admitted the outstanding dues but cited helplessness in clearing them owing to a gap in purchase and sale of power in the National Capital. 

Explaining the heavy outstanding dues, a BSES spokesperson, requesting anonymity, said power purchase cost in Delhi is too high as compared to the power tariff. 

"In the last 10 years, purchase cost has gone up by about 300 per cent while the power tariff has risen only by 70 per cent.

With thanks : Daily Mail UK : LINK : for detailed news. Must view.

DERC to appoint agency for testing of faulty meters

Under attack from BJP and Aam Aadmi Party over "inflated" power bills, Delhi's power regulator DERC has decided to appoint an "independent" agency within a month to carry out testing of electricity meters. 

"We feel consumers should have a choice to get their meters tested by an independent agency. The whole process to appoint the agency will be completed within one month," Delhi Electricity Regulatory Commission (DERC) chairman P D Sudhakar said. 

He said the Commission has already invited bid from private and government entities having accreditation from National Accreditation Board for Testing and Calibration Laboratories (NABL) which functions under Department of Science and Technology of Government of India. 

Sudhakar said in case a meter is found to be inaccurate, then the cost of carrying out the test will have to be borne by the power distribution company which installed it. But if the meter is found accurate then the consumer will have to pay the fee for testing the meter. 

"In case a meter is found to be fast running, then the concerned power distribution company will have to adjust the past bills accordingly," the DERC chairman said. 

At present, consumers have to approach the private power distribution companies for testing of their meters. Consumers also have the option of preferring testing of meters at Central Power Research Institute (CPRI) in Bangalore through the Public Grievance Cell of Delhi government. 

Both BJP and Aam Aadmi Party have been attacking the DERC alleging that most electricity meters in the city run fast. 

Sudhakar said DERC has already set aside Rs 50 lakh for facilitating third party testing of meters. 

The Commission has also set aside Rs 20 lakh for the Electricity Consumer Advocacy Centre which will have a panel of lawyers who will assist consumers to take up their grievances with Consumer Grievance Redressal Forum and courts in Delhi. 

with thanks : Business Standard : LINK : for detailed news.

Delhi's power regulator favours CAG audit of private discoms

NEW DELHI: Two days after announcing a five per cent hike in power tariff, Delhi Electricity Regulatory Commission(DERC) on Sunday said there should be a thorough scrutiny of finances of all three private power distribution companies by Comptroller and Auditor General (CAG).

Chairman of the city's power regulator P D Sudhakar said scrutiny of the accounts of the discoms by the CAG will help knowing the actual financial position of the private companies.

"There should be a CAG audit of the accounts of all the private power distribution companies. We have already sent a recommendation to the Delhi government for it," DERC chairman P D Sudhakar told PTI.

The BJP and Aam Admi Party (AAP) have been demanding CAG audit of finances of the discoms, alleging huge financial irregularities by them. However, the discoms are strongly opposed to auditing of their accounts by CAG.

"We finalised the tariff structure after examining their financial positions. But still I would recommend a CAG audit as it will be very different from the auditing we carry out," the DERC chairman said.

The BJP has been seeking CAG audit into finances of discoms referring to a DERC proposal in May 2010 to cut the tariff by around 25 per cent citing their healthy financial position. The Delhi Government had restrained the regulator from going ahead with the tariff order.

with thanks : ECONOMIC TIMES : LINK : for detailed news.

NGO complains against discom

NEW DELHI An NGO has moved DERC against the discom BSES for distributing pamphlets along with power bills to show that the tariff in Delhi is much less compared to other metros. United Residents Joint Association (URJA) wants action against the discom, claiming that the move was aimed at influencing consumers before tariff determination. It cited a 2010 order by the regulatory body where BRPL and BYPL, both under BSES, were sent show-cause notices for speaking on tariff before it was fixed. 

"Discoms are not allowed to issue pamphlets or make statements on tariff once they have submitted their annual petitions and their scrutiny has begun. Any such move is viewed as an attempt to influence the commission or consumers," said Amit Aggarwal, a senior member of URJA. 

with thanks : Times of India : LINK : for detailed news.