High-voltage hit

The Delhi Electricity Regulatory Commission (DERC) has given the Big Three — BSES Rajdhani, BSES Yamuna and Tata Power Delhi Distribution Ltd — the go-ahead, beginning this year, to “recover dues totalling ₹8,000 crore from consumers through tariff”.

However, in a ‘touch of concern’, the power regulator has asked the distribution firms to be ‘generous’ and extract the amount over a period of eight years.

Considering that Delhi has 34.61 lakh consumers, every household would eventually shell out ₹23,419 extra over their energy bill. That’s revenge for the past!

The timing of the announcement is equally suspect; there is no government in the capital at the moment. None will question DERC extending a free-hand to discoms. Tariffs have already risen by 45 per cent in the last two years, and with no State in Delhi till late 2014, consumers will be at the mercy of the DERC and the Big 3.

Worse, Delhi’s peak power demand is set to touch 6,000 MW this year. Last summer it was 5,653 MW, yet many parts of the city saw at least six hours of power cuts. Hence, this year too, we have every reason to expect we’ll be paying more money for worse service.

Delhi’s long-term future looks as black as the coal the city depends on. Over 73 per cent of the national capital runs its lights and air-conditioners on coal sourced from mines in Jharkhand, Odisha or Uttar Pradesh, where coal availability is fast shrinking and irresponsible mining and increased carbon emissions are making it increasingly unethical to procure.

“Delhi discoms’ regulatory assets (against which the recovery has been sanctioned) have jumped sharply from ₹936 crore in 2008-09 to ₹19,500 crore in 2012-13. This, according to discoms, is due to a mere 70 per cent rise in retail rates against over 250 per cent surge in cost of supply,” stated a report in this newspaper. This gap will continue in the future as price of coal is expected to only rise, a burden the utilities will eventually pass on to the consumers.

This cannot and must not continue any longer. Delhi, being a horizontal city with wide open roof spaces available, can make most out of the sun that shines bright overhead for nearly 350 days a year. Why are then the utilities not looking at solar rooftop photovoltaic as a business model to recover investment in regulatory assets?

Cost can no longer be an excuse, because the economics were never more favourable for solar energy than today. The national average benchmark price of solar has dropped to ₹6.49/kWh, lower than the peak domestic rate of ₹6.80/kWh plus an 8 per cent additional surcharge.

Nor can power companies take refuge claiming viability issues. German utility giants such as E.ON and RWE are reinventing their business model by integrating solar PV into their operations, because they have realised that they will cease to exist if they don’t adopt the future; and consumers are responding well, as they know “they will be paying the same cost for electricity for the next 20 years with assured supply”.

In 2013, despite Delhi setting a meager Renewable Purchase Obligation target of 2 per cent, the state’s actual compliance rate was a mere 0.01 per cent.

The DERC, being the obligatory entity, is responsible for overseeing that Delhi meets its renewable energy target and the state is provided with an alternative source of power that acts as a hedge against rising energy costs.

However, the DERC has often been found to be hand-in-gloves with the very discoms it is sworn to regulate.

The writer is associated with Greenpeace

COMMENT NOW