Delhi discoms offer to surrender surplus power to state govt...

 

Facing allegations of selling a surplus 1,000 mw to group companies at below-market rates to supress profits, BSES discoms have urged the Delhi government to take over management of unused power so that the controversy can come to an end.

Despite the Delhi High court quashing the regulatory order that said discoms could make profit of Rs 3,577 crore a year by selling surplus power alone, consumer groups continue to cite the order to bolster their case that discoms are manipulating electricity trading deals. The Delhi Electricity Regulatory Commission had arrived at the profit figure by assuming electricity price of Rs 5.75 a unit in 2007.

On the other hand, discoms maintain that power is surplus only during non-peak hours when prevailing market rates are low. So, prices are usually lower than rates at which power is purchased from central generating stations under long-term power purchase agreements ( PPAs).

In a letter to Delhi power secretary Puneet Goel, discoms have said they sell surplus electricity through transparent mechanisms like power exchanges, trading and banking arrangements and unscheduled interchange (UI), where all transactions are accounted by the state load despatch centre in compliance with the guidelines laid down by the regulator. Anyway, the discoms have further said that they cannot be held responsible for terms of the PPAs that were signed by the erstwhile Delhi Vidyut Board prior to its privatisation in 2002, and assigned to them in 2007.

“In the interest of transparency and to avoid baseless allegations and unnecessary controversy, the BSES discoms request the Delhi government to take over the entire responsibility for ensuring adequate power to meet the peak demand and sell off-peak power in the most optimal manner,” said the letter sent by Gopal K Saxena, CEO, BSES Rajdhani Power. BSES Rajdhani Power and BSES Yamuna Power together cater to two-thirds of electricity consumers in the national capital.

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BYPL not to get power from Nathpa Jhakri power station…

 

Satluj Jal Vidyut Nigam (SJVN) Ltd has regulated power supply to Reliance-backed discom BSES Yamuna from Nathpa Jhakri power station from January 1 to June 30, 2014, following non-payment of dues.

BYPL had earlier been barred power supply from this Himachal Pradesh-based power plant from October to December 2013, after defaulting on payments and now SJVN Ltd has extended this power regulation till June-end. This deprived the national capital of about 40-50 MW of power.

SJVN Ltd sent a regulation notice to the state load dispatch centre on regulation of supply from its 1,500 MW hydel plant in December, sources said. BYPL's share from the plant is 27.24% of total allocation.

"SJVN Ltd in its notice has informed that power rendered surplus due to regulation of power supply to BYPL would be sold through PTC on energy exchange platform," said an official. Sources said the regulation will continue in 'duration of regulation' or up to an earlier date if the default is rectified.

"The regulation will be communicated by reducing the schedule of BYPL from the identified source (Nathpa Jhakri plant). SLDC Delhi will have to regulate drawal schedule for the intrastate regulated entities and the regional load dispatch centre (RLDC) would regulate drawal schedule of Delhi State Control Area," said a notice served by SJVN Ltd.

BSES discoms have been regularly defaulting on payment to entities like NTPC, NHPC, DTL, IPGCL and PPCL, claiming cash flow crisis and financial difficulties.

The discoms are now in the midst of disagreement with the new government led by chief minister Arvind Kejriwal who not only ordered a CAG audit for the companies but also announced a Rs 200 crore subsidy benefit for consumers, the cost of which owed to the BSES companies would be adjusted against their pending dues to Delhi government. BSES discoms have said that this adjustment would not be sustainable for them.

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ADB plans to fund Delhi Discom’s capital expenditure...

 

Offering a breather to Anil Ambani-owned BSES Rajdhani Power Ltd (BRPL), the Asian Development Bank’s Private Sector Operations Department (PSOD) plans to extend a loan of $80 million to the company, one of the distribution utilities for the Indian capital.

The loan will be used to fund BRPL’s capital investments, which had been impacted after domestic financial institutions expressed their reluctance to increase exposure to the utility.

“It is not a sovereign restructuring but private sector financing to be done by PSOD. It will provide a breather to BSES, which has been unable to raise funds elsewhere,” said a person aware of the development requesting anonymity.

The offer comes in the backdrop of losses and under-recoveries eroding the balance sheet of distribution utilities, resulting in their net worth turning negative.

At the same time, the electricity regulator has turned down a proposal to increase tariffs even as the Aam Aadmi Party (AAP), which has formed the new state government in Delhi, has promised to halve tariffs.

A BSES spokesperson declined comment. The ADB’s India Resident Mission, in an emailed response, confirmed the development and said, “ADB Private Sector Operations Department envisages a loan of USD 80 million in relation to future capital expenditure to BRPL only.”
“The loan has been approved by ADB board,” the email added.

BSES operates in an area of 950 sq. km with a customer base of 3.3 million through BRPL and BSES Yamuna Power Ltd (BYPL). Of these BRPL distributes power to 1.82 million customers spread over 750 sq. km in south and west Delhi.

PSOD provides assistance for projects without sovereign guarantees. These projects can be private entities, state-owned enterprises and municipalities. It also provides commercial co-financing with focus on infrastructure and capital markets or financial sectors.

According to ADB’s loan report and recommendation, “The proposed ADB assistance will provide much needed funding to BRPL for system improvement. BRPL’s existing, mainly public sector owned lenders have limited appetite for further lending to the sector given their overall power sector exposure limits.”

Also, the loan will help in the financing of BRPL’s capital expenditure over the next two years.
“Successful implementation of the project will rehabilitate and/or augment approximately 486 distribution transformers, 266 kilometers (km) of 11 kilovolt (kV) distribution lines, and 16km of extra high voltage lines. It will add 123 new substations, 285 new distribution transformers, 221km of new 11kV distribution lines, and 21km of new extra high voltage lines as well as additional equipment to improve the automated system for billing and settlements,” the report added.

Delhi’s power purchase cost has spiked since 2009 with the distribution utilities incurring losses in power trading. It is estimated that the utilities suffered a loss of Rs.900 crore in 2011-12 due to inaccuracies in demand forecasting and fall in rate of sale of power in the short-term market nationally. Delhi’s power demand is around 5,000 megawatts (MW).

According to PricewaterhouseCoopers, “Higher losses and under-recoveries have eroded the balance sheet of the Discoms; the Discoms had negative net worth in all three years from FY11 to FY13 in spite of equity infusion in BYPL and BRPL in FY12 and in TPDDL in FY13.”
TPDDL is short for Tata Power Delhi Distribution Ltd.

After becoming Delhi’s chief minister, AAP leader Arvind Kejriwal, in a major bureaucratic reshuffle, removed power secretary R.K. Verma and brought in Puneet Kumar Goel in his place.

In addition, Goel also holds the position of chairman and managing director of Delhi Power Co. Ltd and chairman of Indraprastha Power Generation Co. Ltd and Pragati Power Corp. Ltd. Kejriwal has alleged that Delhi residents have been paying twice what they should be for electricity.

ADB plans to maintain its lending levels to India at around $2 billion annually over the next three years. Takehiko Nakao, president of the bank at the time of ADB’s board of governors meeting in May, said though equity investment is an option, the risks need to be assessed before taking a decision.

In its report titled Energy Outlook for Asia and the Pacific released in October, ADB said that India’s energy sector will need $2.3 trillion in investments by 2035, accounting for the maximum investment requirement in South Asia.

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Delhi Government orders CAG audit of private power companies...

 

Rejecting the contention of private power distributors, the Delhi government on Wednesday ordered a CAG audit of their finances, fulfilling yet another election promise of the Aam Aadmi Party.

"We have ordered an audit of the private power distribution companies. The CAG has said it will do the audit," chief minister Arvind Kejriwal told reporters after a meeting of the Cabinet which took the decision on audit.

He said the Lt Governor's order on the audit of the companies will go to the CAG on Thursday. "From tomorrow (Thursday), the audit will begin," he said.

The Delhi government had given time to the three companies -- BSES Yamuna Power Ltd, BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd -- till this morning (Tuesday) to give their views on why there should not be a CAG audit of their companies.

Asked what the companies have told government, Kejriwal said they had given numerous reasons but not one reason why the audit should not be done.

"Nobody has given any reason why there should not be an audit," he said adding the auditing will cover from the days the power distribution was privatised.

He also rejected the view that the matter was subjudiced and the decision cannot be taken. "The matter has been in the High Court and proceedings are on. No stay has been granted. Even now the proceedings can go on."

On complaints about the defective quality of power meters, the chief minister said the government would approach IIT Delhi and Delhi College of Engineering for suggestion to improve the quality of meters.

Kejriwal said there had been constant demand for auditing of the private power distribution companies and the previous government was "misleading" the people saying the matter was in the court.

"What the previous government could not do in four years, we have done in four days," he said.

Asked about BJP leader Arun Jaitley's criticism that his government was taking populist measures with short term objective, Kejriwal said people can argue about the quantgity of water to be supplied free but any civilised government has a duty to provide it.

When told that the Congress government in Haryana has slashed power tariffs and a Congress MP in Maharastra was pleading for reducing tariff on the lines of the AAP government, he said "I am very happy".

"We will teach them politics," he added with a chuckle.

Asked about BJP's criticism that he was keeping mum on the 'corruption' of the previous Congress government after coming to power, he shot back "let Harsh Vardhan send details.

We will immediately take action."

On Tuesday, Kejriwal had announced 50 per cent subsidy to thsoe consumers whose monthly consumption does not cross 400 units.

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Delhi Government slashed electricity tariff by 50%...

 

Aam Aadmi Party-led Delhi government on Tuesday cleared a 50% cut in electricity tariffs, delivering on yet another poll promise a day after it announced metered consumers will get 20 kilolitres water every month free of cost.
 
The government was also on course to ordering an audit by the national auditor into the finances of three power distribution companies, another key poll promise.
 
The decision to subsidise power tariff, which will involve a cash outgo of Rs. 61 crore in the next three months, was announced by chief minister Arvind Kejriwal after a meeting of the cabinet.

The subsidy would be applicable to those households that consumed up to 400 units. And those who use electricity above this limit will have to pay full amount for the entire consumption. The decision is expected to benefit 28 lakh of 34 lakh households.
 
Questioned about the subsidy that will be available only for three months, Kejriwal said further decision on this would be available only after the audit report.
 
He said the cabinet would meet tomorrow after the three companies submit to the government their views on the proposal for audit of their finances.
 
"Only after studying their replies we will take a decision whether to audit or not," he said.
 
To a question whether the government has the right to decide on slashing power tariff when a regulator was there, the CM shot back the government can provide subsidy.
Earlier, defying doctor's advice, an unwell Kejriwal met comptroller and auditor general Shashi Kant Sharma to discuss the issue before going into a cabinet meeting.

After the meeting with the CAG, Kejriwal said the national auditor is ready for the job. He said the cabinet will tomorrow go through the representations to be made by the power companies and take a decision.
 
"Then there will be an order by the Lt Governor," he said, denying that a decision has been taken and only formalities are being completed.
He said the CAG told him it all depends on how much work is involved and how fast the companies would provide documents.
 
The BJP and AAP have been demanding CAG audit of finances of the discoms, alleging huge irregularities by them.
 
Riding the anti-corruption wave, the AAP made a phenomenal electoral debut by reducing Congress to number three after having tasted power for the past 15 years.
 
However, all the three companies— BSES Yamuna Power Ltd, BSES Rajdhani Power Ltd and Tata Power Delhi Distribution Ltd—have been opposing it.

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DERC turns down discoms power tariff-hike plan in Delhi...

 

The Delhi power regulator has turned down a request by the distribution companies to hike power tariffs in the Capital, a day before the Aam Aadmi Party (AAP) chief Arvind Kejriwal takes oath as chief minister. This is probably the first time that a claim by the distribution companies has been turned down.

Distribution companies BSES Rajdhani Power Limited (BRPL), BSES Yamuna Power Limited (BYPL) and Tata Power Delhi Distribution Limited had sought the hike as power purchase cost adjustment (PPAC) which would have been effective for the quarter of January to March 2014.

This increase was sought to cover the increased expenses incurred by the companies from July 1 to September 30, 2013, and is done every quarter. While BYPL had asked for a steep seven per cent hike, BRPL had sought a 3.5 per cent hike, TPDDL had asked for two per cent hike.

“There is a formula to work out PPAC, which was approved in the tariff order announced in August. After studying their claims and verifying them, we found that there was no need for an increase as they have not incurred additional cost over what has been allowed to them,” said PD Sudhakar, chairman of the Delhi Electricity Regulatory Board (DERC).

The power tariffs were last revised for the quarter of May to July when the power regulator had approved a 3 per cent hike for TPDDL, and a 4.5 per cent hike for areas under BRPL and BYPL.

AAP’s election manifesto says that the party will slash power tariff in the Capital by 50%. The party, set to form the government in Delhi, has also promised to conduct audits of the distribution companies.

A possible fallout of the political changes in Delhi was witnessed recently when TPDDL, which supplies electricity to north Delhi, submitted its annual revenue requirement (ARR) to DERC and didn’t seek a hike. “They have left it on us to decide. They submitted their papers giving out financial details and have admitted that there is a shortfall,” said a senior official. BRPL and BYPL are yet to submit the ARR.

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Upon Petitions of R-Infra's Delhi Discoms, APTEL directs DERC to effectively implement Fuel & Power Purchase Adjustment mechanism...

 

Reliance Infrastructure's Delhi Distribution Companies BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited BYPL) have filed and petition to the Appellate Tribunal of Electricity  for some fundamental issues relating to the functioning of the Delhi Electricity Regulatory Commission as well as certain aspects of the tariff determination for the Discoms. APTEL has issued a judgment in favor BRPL and BYPL and directed DERC to effectively implement the Fuel & Power Purchase Adjustment Mechanisms while arriving at tariff for the Discoms.

 

Major points as filed by the Discoms are:

• Adverse impact on the cash flow and financial crisis due to the acts and omissions by the Delhi Commission by failing, refusing and neglecting to perform the statutory functions.
• Ineffective implementation of an efficacious Fuel Price Adjustment.
• In spite of lapse of nearly 9 years since the enactment of the Act, 2003, there has been no effective implementation of an efficacious Fuel Price Adjustment.
• The first effective order allowing Fuel Price Adjustment was passed on 1.2.2012 giving an ad-hoc allowance of 5% and an unjustified disallowance of 5.75% from the claim of 10.75% increase as per the prescribed formula.
• The second order was passed on 1.5.2012 by the State Commission, which again gave only an ad-hoc allowance of 6% as against the claim of 7.27% increase without dealing with the backlog of the previous quarter.
• Lace of effective Power Purchase Cost Adjustment Mechanism for the tariff calculations.
• Continuous failure to determine the cost of the reflective tariff in a timely manner in terms of Part VII of the Act, 2003 resulted in an ever increasing accumulation of a Regulatory gap.
• The Delhi Commission refused to provide any recovery mechanism and amortization schedule along with carrying cost for the admitted revenue gap of nearly Rs.3658 Crores accumulated over the years.
• The Delhi Commission refused to follow the directions and findings of this Tribunal in three direct judgments related to Delhi Commission since 2009 on the basis that the Delhi Commission has already proposed to file Appeals in these cases before Hon’ble Supreme Court.

APTEL after hearing to the pleas of both the parties have given the following judgments:

• The Petitions filed by the Discoms under Section 121 of the Electricity Act, 2003 are maintainable.
• The refusal by the DERC to implement the judgments of this Tribunal would amount to judicial indiscipline and is against the settled position of law. Mere filing of the Appeal or proposal to file the Appeal would not amount to the effect of automatic stay of the Tribunal’s judgment.
• However, in view of the affidavit filed by Delhi Commission in Appeal No.14 of 2012 and submissions made in these petitions, any penal actions against the DERC are not proposed except to advise it to correct its mistakes committed earlier and follow the directions issued by APTEL in future.
• As regards recovery/amortization schedule of the admitted regulatory assets and effective implementation of Fuel & Power Purchase Adjustment mechanism, DERC is directed to take immediate action in pursuance to the directions given in OP No.1 of 2011 dated 11.11.2011.

The full judgment as issued by APTEL can be downloaded from here.

Source: ATPEL

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DERC sanctioned Fuel Price Adjustment charges for TPDDL, BRPL and BYPL…

 

 

Power India found that the Delhi Electricity Regulatory Commission (DERC – Power Regulator of Delhi) has sanctioned the Fuel Price Adjustment (FPA) charges to three Distribution Companies (Discoms) of Delhi.

 

As per the notification posted on DERC’s website, the FPA Charges sanctioned to the Discoms are as under:

• Tata Power Delhi Distribution Ltd (TPDDL) / NDPL : 4.0%
• BSES Rajdhani Power Ltd (BRPL): 6.0 %
• BSES Yamuna Power Ltd (BYPL): 7.0%

 

Power India further found that TPDDL/NDPL, BRPL and BYPL has in the month of April 2012 have asked DERC to sanction FPA at the rate of 4.67%, 7.27% and 9.23% respectively.

However, DERC after reviewing the applications and other details have reduced the FPAs requested by the companies.

 

The above FPAs will be levied only on energy charges will be in effect from May 1 to July 31 for the period of 3 months.

 

 

More Literature on this topic:

http://zeenews.india.com/business/news/economy/power-bills-under-bses-to-go-up_46946.html

http://www.derc.gov.in/ordersPetitions/orders/Misc/2012/FPA%20For%20Qtr%20Jan-Mar,%202012.pdf

 

 

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