Five years of hard work ahead

There is no denying that the city government can slash power tariff by 50 per cent, as promised during the Aam Aadmi Party election campaign.

But the moot question is whether the city government is willing to shell out 10 per cent of its total budgetary allocation on development work only to reduce electricity rates.

Going by the current tariff, the subsidy that the city government has to pay to private power distribution companies (discoms) for reducing electricity rate is Rs 1,600 crore a year, according to experts. The total amount allocated on development in this financial year is Rs 14,000 crore.

Reduction in tariff will lead to higher consumption of power that may translate into an increased subsidy burden on the state exchequer in the coming years, experts add.

Power experts say that the city government has to take a call. “Of course, power tariff can be reduced to 50 per cent, but the government has to decide how much it wants to spend on subsidy,” says Pramod Deo, former chairman of the Central Electricity Regulatory Commission (CERC). “If tariff is low, people will consume more electricity, and subsidy will also go up,” adds Deo.

The bone of contention between the city government and the discoms is the amount that the distribution company BSES owes to two government power generation companies.

The BSES owes Pragati Power Corporation Ltd (PPCL) and Indraprastha Power Generation Company Ltd (IPGCL) over Rs 2,500 crore, and the Delhi Transco Ltd over Rs 650 crore, sources say. 

Earlier, the city government had tried to reduce tariff by adjusting the amount owed by the BSES with the subsidy. But the move stirred a conflict. “The city government cannot do this. According to law, the subsidy has to be paid upfront; it cannot be adjusted,” says Shakti Sinha, former Delhi principal secretary (power).Discom sources say that since 2002, Delhi discoms’ cost of buying power has increased by 300 per cent, but the retail tariff has shot up by only 90 per cent.

“This revenue gap is the amount that the Delhi Electricity Regulatory Commission (DERC) owes to discoms,” say the source.

“The revenue gap is the root cause of the issues plaguing the Delhi discoms. A cost-reflective tariff and a clear plan to liquidate the built-up revenue gap will resolve financial woes of the discoms,” he adds.

Even some power experts say that tariff must be regulated to meet expenses. “Under the Electricity Regulatory Commission Act, 1998, the DERC was set up to revise electricity rates every year. The DERC had revised the tariff soon after the Lok Sabha elections last year, but the 7 per cent hike was rolled back eyeing the Delhi Assembly polls,” says a power expert.

In Delhi, the power sector has been privatised since 2002. After the unbundling of the Delhi Vidyut Board in July 2002, distribution of power was given to BSES Yamuna Power Ltd (BYPL), BSES Rajdhani Power Ltd (BRPL) and Tata Power Delhi Distribution Ltd (TPDDL).

Both the BSES discoms distribute electricity to 33.96 lakh customers in two-thirds of the city covering central, east, south and west Delhi, according to the BSES website. 

TPDDL distributes electricity in north and north-west Delhi serving a population of 60 lakh, says its website.

Jal Swaraj

And then there is AAP promise on water supply. The party has promised Jal Swaraj by providing free supply of 20 kilolitre water a month for every household in Delhi, which has a population of over 1.6 crore. It translates into 700 litres of water everyday.
The AAP said it will ask people to consume water judiciously. But experts say that providing free water supply will be difficult. Massive migration has led to water and sewerage related problem across the city.

Experts say that the solution to water woes lies in the revival of Yamuna and rainwater harvesting. “But it’s going to be a Herculean task,” says a government official. 

The AAP plans to ensure that the city gets more water supply from Munak canal in Haryana as directed by the High Court. The party will try to expedite the process of reviving water treatment plants in Bawana, Dwarka and Okhla. “It sounds good on paper but implementation will take a lot of time,” he adds.