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How Aam Aadmi Party would reduce power tariffs in Delhi

How Aam Aadmi Party would reduce power tariffs in Delhi

This is a long stuff, but you ought to read this if you wish to understand why power tariffs in Delhi are increasing sharply.

Facts indicate an active and unholy collusion between Sheila Dikshit government and power Distribution Companies (popularly known as DISCOMS).

1. Electricity was privatized in Delhi in the year 2002. Mrs Sheila Dikshit, at that time, said that since the distribution losses in Delhi were very high, electricity was being privatized. The private companies would bring in efficiency and reduce distribution losses. Once distribution losses were brought down, the benefits would be passed on to the consumers and electricity rates in Delhi would be reduced. In 2002, distribution losses were more than 50%. Today these losses have been brought down to 15%. The private companies must be given credit for that. This has resulted in savings worth thousands of crores. But these savings have not been passed on to the consumers. Power Tariffs, rather than being reduced, have been increased manifold in the last few years. Where have those thousands of crores of rupees gone, which were saved as a result of reduced distribution losses?

2. Delhi Electricity Regulatory Commission (DERC) fixes power tariffs in Delhi. In 2010, Mr Brijender Singh was the Chairperson of DERC. He was a very honest man. The companies approached him saying that they had incurred a loss of Rs 630 crores and power tariffs in Delhi should be increased. When he studied their accounts, he discovered that the companies had actually made huge profits of Rs 3577 crores. So, he drafted an order saying that the power tariffs in Delhi ought to be decreased by 23%. We have a copy of his draft order. He further wrote that the profits of these companies were likely to increase manifold in the coming years and power tariffs in Delhi would decrease substantially in subsequent years. This order was supposed to be passed on 5th May 2010. Just a day before that, Mrs Sheila Dikshit wrote a letter to Mr Brijender Singh on 4th May 2010, directing him not to pass that order. We have a copy of that letter. Why did she do that? What was her interest? Prashant Bhushan, National Executive member of Aam Aadmi party, challenged Mrs Dikshit’s intervention in Delhi High Court. After about an year, we won the case. Delhi High Court passed very strong strictures against Mrs Dikshit and DISCOMS.

3. But Mr Brijender Singh retired by then. Mrs Dikshit appointed a very pliable person called Mr P D Sudhakar as the next Chairperson. Mr Sudhakar immediately accepted whatever was presented to him by the companies without verifying their claims. He accepted that the companies were making losses and started increasing power tariffs in Delhi. Since he assumed office in 2011, power tariffs have been increased by 150%.

4. DISCOMS have fudged their accounts and are creating artificial losses by adopting several methods.

a. Delhi is a power surplus state. DISCOMS have created several sister companies. The surplus power is sold by DISCOMS to their sister concerns at prices much lower than purchase price, thus creating huge artificial losses. The sister concerns, in turn, sell this power at much higher rates in the market.

b. The DISCOMs do not account for revenues from several entities. For instance, in 2008, they showed revenues from Delhi Jal Board and Delhi International Airport as zero. Obviously that cannot be true. Delhi Jal Board and Delhi International Airport consume huge quantities of electricity. So, where did the revenues received from them go?

c. In 2011, in a test check, it was revealed that these companies were showing zero revenues from almost 10% of Delhi’s consumers. When these consumers were approached, they said they had paid their bills. Then where did their money go? Are these companies taking revenues from several consumers in some undisclosed accounts?

5. There are many such instances which show that the accounts of DISCOMS are fudged and cannot be relied upon. Many RWAs and several Delhiites have demanded that no hike in power tariffs should take place till their accounts are audited by CAG. Mrs Dikshit says that she is ready but the companies are not agreeing to it. How can the companies refuse to get their accounts audited? This creates a serious suspicion that all the allegations are perhaps true. Besides, how can the Chief Minister be so helpless before power distribution companies? What is the reason for Mrs Dikshit’s helplessness? Why doesn’t she cancel the licenses of those companies which are refusing to get their accounts audited?

6. A few months back, the DISCOMS have approached DERC saying that they have incurred a loss of Rs 20,000 crores and they want further increase in power tariffs. Since this is election year, the government is not increasing tariffs right now. But immediately after elections, you should be prepared for a steep increase in power tariffs if Mrs Dikshit is voted back to power. How much would be the increase? There are 35 lakh consumers in Delhi. So, the increase could be an average of Rs 5000 per family per month.

7. Two of the three DISCOMS in Delhi are owned by Mr Anil Ambani. Have Ambani brothers ever done any loss making business? When Mr Anil Ambani started incurring a small loss in Delhi Airport metro line, he simply abandoned that project. Then why is he still supplying power in Delhi despite an annual loss of Rs 20,000 crores? Obviously, the accounts are fudged. Actually, he is making huge profits. He also could have been assured by Congress (and perhaps BJP too?) of steep power tariff hike post elections.

What will Aam Aadmi Party government do?

We will immediately order audits of DISCOMS. Those DISCOMS who do not agree, their licenses would be cancelled. The decision to increase or reduce tariffs would be taken only after audit report is received. Our estimates indicate that post audit, power tariffs would reduce by at least half of their present levels.

If you have any ideas, feel free to write to me.

Warm regards,
Arvind Kejriwal

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