As power outages in the capital remains a reality, the discoms have been demanding an increase in tariff citing high input costs. Tata Power Delhi Distribution limited Chief Executive Officer Praveer Sinha, in an interview to Prashant Mukherjee of The Pioneer said that the recent increase in domestic natural gas price warrants a 20 per cent rise in tariff in the State. The company which is planning for a public issue says that the roof top solar panels will be a game changer in the country in the next few years. Excerpts….
let me start with something which the consumers have to live with, the area of power tariff. What do you make of the recent increase in domestic gas price and will there be any increase in the offingIJ
Ans: As you know the input cost of power has gone up significantly with increase in prices of coal, diesel, gas and manpower. All these factors have added to the cost of power. In last 10 years, the input cost for power purchase has gone up by 300 per cent whereas the tariff has gone up by only 90 per cent. The recent increase in domestic gas price from $4.2 per unit to $5.6 per unit, which is about 33 per cent increase, will have a direct impact. The recent increase in gas price will translate in atleast 20 per cent hike in power tariff. So, if you were paying Rs5 per unit now you will have to pay Rs6 per unit.
The consumers are not willing to buy the argument of your increase in power prices, since most of the power generating companies are making huge profits and discoms are reporting losses.
Ans: This is the anomaly today in the country. The power generating companies are making money, the banks which finances them makes money. It is also a matter of concern that the distribution companies on the pass through mechanism pushes the burden on the discoms for increase in any cost. Consequently, the increase in power tariffs doesn’t take place. That’s the challenge we have currently. The policy of adjustment tariff is already there but the diligent implementation is not done properly.
So will the consumers ever see a decrease in tariff or reduction in their power billsIJ
Ans: Roof top solar will come. This will be a huge game changer in a sense that people will get an opportunity to generate electricity. They will not only be able to consume it but also be able to give it to others. The large industries or corporations or commercial establishments who have large consumption of electricity, can put the solar panel on their roof top and generate electricity for their own consumption and after their consumption they can sell it and earn revenue from that. The Government notification has just come and discussion process has been initiated with various parties.
The setting up of solar panel are highly capital intensive in nature. Have any parties shown interestIJ
Ans: lot of interest has been shown by many corporate houses. There will be two models typically. First, the owners of the corporate establishments, they will put their money. Right now they are buying power at Rs9 so this power will substitute the Rs 9 power. The only thing is what they sell additional they will get Rs5.50 per unit. But they will get over and above a capital subsidy on the total amount. The capital subsidy is supposed to take care of the difference in cost of selling and cost of generating power. To that extent it becomes a very attractive proposal.
Another model, whereby they give only their roof and someone else comes in and sets up the unit and he will then charge at the same rate which is being captively consumed and for the balance he will get from the distribution company and over a period of 5-7 years he will recover his investment. Thereafter, it becomes free of cost to the owner and the financing will be arranged by the third party.
Can you name few of the parties who have shown interestIJ
Ans: These are early days and to crystalise these thoughts will atleast take us 3-4 months. We need to understand what sort of model people will be interested. Secondly, when you do this, we also need to have a guarantee as to who will be the suppliers of these panels. If you have fly by night operators then there is a problem. Therefore, we need to go through the process of preferred vendors. So, will do the bidding for that. Bidders will have to give a guarantee of say 5 years. We will of course do the supervision of whole commission. It has to be a viable proposal and which can be sustained.
At a time when most of the State discoms (including Delhi) have been making huge losses, you are the exceptional with recently declaring dividend. What is the receipe and why aren’t others following itIJ
Ans: Basically, what has happened is that most of the State discoms have very high losses. Over and above that their collection efficiency, their ability to supply power is also poor. They do not have money so they do load shedding, therefore, their revenue comes down drastically. While in our case we supply at N-1. If suppose to an industry we supply 20 hours instead of 24 hours, therefore for 4 hours we are not supplying at Rs9, which is a huge loss. This is giving me a tariff which is more than my cost of purchase. Because if we do not supply to them which is giving me money how do we cross subsidise. This is where we have been able to do very well. We are working on network enhancement, giving 24*7 power supply, ensuring uninterrupted supply of power to our consumers so that there is never a failure, better customer services by providing them easy bill cash collection centres.