There has been a glut of applicants to fill up the post of Delhi Electricity Regulatory Commission (DERC) chairman PD Sudhakar, who will be demitting his office by the end of January.
According to sources, 58 people, including sitting judges of High Court and half a dozen secretaries to the Government of India (GoI), have applied for the DERC chairman’s job and 93 others have applied for the post of its members. The Arvind Kejriwal Government has appointed Justice (retd) SN Aggrawal - also heading the Commission of Enquiry probing the CNG fitness scam - as the chairman of the three-member committee to screen the candidates for the DERC - the only body which decides power tariff every year.
According to sources, list of two members is to be provided by the screening committee in the order of preference for the each of the post of chairman and member of the DERC. “As per the provision of selection 85 (4) of Delhi Electricity Act 2003, the selected person has no financial interest that selection panel has to ascertain,” the sources said.
Top sources told The Pioneer the biggest challenge before the new DERC chairman would be to realise Rs 8,000 crore worth regulatory assets from consumers. While the DERC wants to recover this money over a period of seven years, the discoms want it done in three years only. It was on November 25, 2015 when the Government had issued advertisement for these posts.
Sudhakar had joined in April 2011 as chairman of the DERC. After his joining, a controversy was created on the issue of power tariff hike as his predecessor Brijendra Singh had noted that power tariff should not be hiked in the national Capital in view of financial health of three discoms in 2010. Sudhakar reportedly played an important role in power tariff hikes. Besides Sudhakar, JP Singh, a 1977 batch IAS officer who had joined the DERC as its member in February 2011 is also retiring by next month.
There is a general impression that discoms - BSES Rajdhani and BSES Yamuna (51 per cent stakes in both companies are owned by the Anil Dhirubhai Ambani group) and Tata Power Delhi Distribution (in which Tata Power holds a 51-per cent stake) -- want their own person as DERC chairman so that they can easily increase the power tariffs.
The issue of power tariff and the DERC has become an issue with the AAP Government as Chief Minister Arvind Kejriwal issued an order to get the audit of the three discoms done by the CAG despite strong opposition by the DERC. later the Delhi High Court overruled the Government’s decision to get CAG audit done of the private power companies.
Moreover, power supply and tariff setting in the city became a matter of heated debate after the introduction of the concept of ‘regulatory assets’, which included a portion of the approved expenses of the discoms that were not taken into account in tariff-setting. Simply put, these assets are the difference between the amounts owed to the discoms and the amounts actually collected from consumers. Regulatory assets were created in order to avoid increasing tariffs in line with the increase in cost of power generation.
While discoms had been given an assurance that the expenses would be reimbursed at a more convenient stage later, an assurance was also given that consumers would not be burdened with power rate hikes. By March 2014, the total amount of regulatory assets of the three discoms is said to have crossed Rs 20,000 crore.
A senior bureaucrat said, “The creation of regulatory assets was the biggest problem. Delhi is a classic case where the regulator has let down the citizens since it introduced a concept as illogical as regulatory assets without thinking that they were not solving the problem but compounding it. It is always a better idea to go for tariff hikes every now and then instead of postponing it for a ‘more convenient stage’. Through this practice, the regulator was simply postponing the inevitable (rate hike), which will result in a sudden burden for consumers at a later date.”