Power subsidy will not go to discoms

Govt to clear these firms' debts instead

The over Rs 70 crore monthly subsidy for slashing consumers’ electricty bills by half shall not be paid by the Delhi government directly to private power distribution firms.

Instead, the amount will be transferred to the state-owned power generation and transmission companies whose dues have not been cleared by these discoms, government sources said.

A discom source said the that the mode of payment of the monthly subsidy, starting this month, had still not been communicated to the private companies.

A power expert admitted that such adjustment of subsidy against dues is always bad news for any company. “It obviously causes a cash shortage at the end of the monthly billing cycle,” said a retired official of the erstwhile power utility – Delhi Vidyut Board.

But sources said the possibility of “unhappy” discoms disrupting power supply  to consumers was negligible as a similar arrangement was successfully tried out during the 49-day stint of the Kejriwal government in 2014. 

A top aide of Delhi Power Minister Satyendra Jain said there would only be book entries of Rs 70 crore a month, transferring funds to the power generation and transmission companies’ accounts.

“There will be no fund flow to the discoms as a result of the subsidy announcement,” said the official, adding that the three discoms owed a combined amount of Rs 1,742 crore to both generation and transmission companies.
Officials claimed the Kejriwal government has  managed to achieve two goals with its decision of slashing power tariff.

“Not only have 36 lakh consumers been offered the tariff cut but the government’s own cash-strapped companies will also get the funds to pay the central power plants to purchase electricity for the high summer demand,” said an AAP functionary.

The subsidy money will help transmission company to pay fees to central agencies and power plants. The generation company will get more flexibility to purchase coal.
The Delhi Transco Limited is yet to recover Rs 1,000 crore dues from the discoms. Similarly, the discoms owe Rs 742 crore to Genco, the power generation company which supplies electricity from Rajghat, Indraprastha and  Pragati units in the city.
The discoms  have been demanding a 10-15 percent increase in tariff citing higher operating costs. But a Delhi government official said when the matter comes up before the Delhi Electricity Regulatory Commission they would present a strong case to counter the demand.

“Since the private distribution companies came into the city, the power rates have been hiked by 70 per cent. We are going to ask the DERC to find out where these companies have been selling the surplus power and what kind of capital expenditure have these companies made on infrastructure upgradation like transformers and sub-stations,” said the official.

The discoms are joint ventures between the private distribution companies – BSES Rajdhani and BSES Yamuna and Tata Power – and the Delhi government. The government holds 49 per cent stake in the discoms.

Fulfilling two major poll promises, the Aam Aadmi Party government in February announced a 50 per cent subsidy on monthly power consumption of up to 400 units in homes. The power subsidy scheme will cost the government Rs 70 crore for the month of March and a total of Rs 1,427 crore for the next financial year.