Delhi's power regulator favours CAG audit of private discoms

Two days after announcing a five per cent hike in power tariff, Delhi Electricity Regulatory Commission (DERC) today said there should be a thorough scrutiny of finances of all three private power distribution companies by Comptroller and Auditor General (CAG).
Chairman of the city's power regulator P D Sudhakar said scrutiny of the accounts of the discoms by the CAG will help knowing the actual financial position of the private companies.
"There should be a CAG audit of the accounts of all the private power distribution companies. We have already sent a recommendation to the Delhi government for it," DERC chairman P D Sudhakar told PTI.

The BJP and Aam Admi Party (AAP) have been demanding CAG audit of finances of the discoms, alleging huge financial irregularities by them. However, the discoms are strongly opposed to auditing of their accounts by CAG.
"We finalised the tariff structure after examining their financial positions. But still I would recommend a CAG audit as it will be very different from the auditing we carry out," the DERC chairman said.
The BJP has been seeking CAG audit into finances of discoms referring to a DERC proposal in May 2010 to cut the tariff by around 25 per cent citing their healthy financial position. The Delhi Government had restrained the regulator from going ahead with the tariff order.

Although DERC was strongly arguing for a cut in tariff, the three-member regulator, following retirement and subsequent appointment of two new members later in 2010, had taken a sympathetic approach to the demands of the discoms and effected a series of tariff hikes.

Asked about allegations that the DERC have been favouring the discoms by heeding to their demands of hike in tariff, Sudhakar rejected the allegations and said the rates are finalised after going through the accounts of the companies and
taking views of all the stakeholders.
On whether tariff was hiked marginally by DERC due to political pressure as assembly polls in Delhi which are due in November, Sudhakar said the tariff order was finalised purely on the basis of laid down norms.

"There was no political pressure. We prepared the tariff order based on our calculations and laid down norms," he said.
Asked about any possible hike in near future, Sudhakar said the commission will review the Power Purchase Adjustment Cost after three months and the tariff may go up if power purchase cost goes up.
The DERC on Friday hiked the tariff for domestic consumers by five per cent. But with the regulator waiving the fuel surcharge and the city Government swiftly announcing a subsidy for those limiting their monthly consumption to 400 units, the tariff will in effect come down marginally for low-end consumers.

Slamming Delhi government and DERC for hike in tariff, the BJP has already announced an agitation against the "anti-people" decision and indicated that the party will make it a major issue in the run up to the assembly elections slated for November.