Under fire, DERC rolls back power tariff hike in 24 hours

DERC said the hike was rolled back "realising" that a number of power generation companies provided only partial information about price of fuel.

By: Press Trust of India Written by Kaunain Sheriff M | New Delhi | Updated: November 15, 2014 1:07:57 am
India has the world's fifth largest reserves of coal and supply bottlenecks have been forcing many power generators to import coal from abroad. (Reuters) DERC said the hike was rolled back “realising” that a number of power generation companies provided only partial information about price of fuel. (Source: IE Archive)

Barely 24 hours after it announced a power tariff hike, the capital’s power regulator on Friday withdrew the hike stating that it is “re-examining” the claims made by discoms keeping in view the “overall interests” of the consumers.

The Delhi Electricity Regulatory Commission (DERC), after its meeting on Friday morning, rolled back the fuel surcharge, stating that it has to “re-examine” and “further scrutinise” the disclosures given by the power generation companies and also verify the claims made by the discoms that they needed to be compensated for the variations in the market-driven fuel costs.

“In the overall interests of the consumers, we have to examine every disclosure that is made on cost of power production. Hence we have to re-examine the decision. In particular, we have to further scrutinise the information given by the power generating companies like NTPC and then verify those with the claims made by the discoms,” DERC chairman P D Sudhakar said.

The regulator on Thursday had given its nod to a fuel surcharge of 7 per cent for BSES Yamuna Power, 4.5 per cent for BSES Rajdhani Power and 2.5 per cent for Tata Power. The fuel surcharge was part of the power purchase adjustment charges (PPAC) — introduced in 2012 — and levied to compensate the discoms for variations in fuel costs in the market. The DERC last raised PPAC in May and had discontinued it in July.

The official also said this decision to roll back the hike was taken keeping in mind the Central Electricity Regulatory Commission (CERC) guidelines. “The CERC has given certain guidelines for disclosure, so that it is clear what the additional charges incurred by the discoms for the variations in the fuel costs are. For this, we also have to examine the details given by power generating companies,” he said.

The regulator said it would require 14 days to re-examine its decision, after it receives the “additional information” from the power generating companies.

“We have now asked for the additional information to verify the claims of the discoms. We hope they provide us with the information as early as possible. After which, we would require 14 days to examine and come up with a final decision,” the chairman said.

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