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Delhi Electricity Regulatory Commission’s refusal to allow a rise in consumer tariffs has resulted in a 10 per cent rise in the regulatory assets of Tata Power Delhi Distribution Ltd (TP-DDL), CEO Ganesh Srinivasan told BusinessLine .
The regulator had refused to raise tariffs for the ongoing financial year amid the coronavirus pandemic.
“Covid-19 came at quite a bad time for us,” Srinivasan said. “Our regulatory assets were already at ₹5,200 crore at the start of the pandemic. Now we’re around ₹5,700-5,800 crore. This is our company’s biggest challenge.”
Regulatory assets are those expenses of electricity distribution companies that they can legally pass on to customers with a hike in tariff, but are unable to as electricity regulators refuse to allow them to do so.
“We need at the minimum an 8-10 per cent hike in tariff to start some amount of liquidation,” Srinivasan said. “At present our burden is only growing.”
“All of this cost has been funded through external borrowings,” he added. “We are finding it increasingly difficult to get additional funding from the banks because they are not very keen to lend to the power distribution sector.”
Discoms around the country are known to be bleeding as they are not being allowed to break even by the regulators, which are informally controlled by elected State governments that find it politically disadvantageous to hike electricity prices.
“We have requested the regulator for a cost effective tariff. Ultimately, the cost will have to be paid by the end-customer, either today or tomorrow along with interest,” Srinivasan said.
TP-DDL is a joint venture between Tata Power, which holds a 51 per cent stake, and the Delhi government. The company supplies electricity to 18 lakh consumers.
Meters of about 2 lakh TP-DDL consumers have till now been replaced with smart meters, Srinivasan said, adding that the company plans to replace an additional three lakh.
As it procures more renewable energy, the company also hopes to grow its battery storage system from 20MW to 100-150MW to stabilise its grid. “The share of renewables in our supply is 21.5 per cent, and it is growing by about 1.5 per cent each year,” Srinivasan added.
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