Delhi may be spared a power tariff hike, again

For the second year running, Delhi may not see a power tariff hike as a consequence of the state government planning to subsidise power distribution companies (discoms) and spare consumers the burden of paying more for errant power supplies.

While no fresh hike has been recommended for the year, the 10 per cent hike announced in 2005-06 will continue this year too. It is this hike that will be offset through the subsidy. The major difference over last year is that this time around the discoms will not absorb a portion of the increase.

Last year, NDPL, BSES Rajdhani and BSES Yamuna gave a 5 per cent discount to users, while the state gave a matching subsidy.

"The Delhi Electricity Regulatory Commission has not recommended any fresh hike in electricity tariffs, apart from the 10 per cent tariff hike that was recommended last year," an official said.

The new tariff order is expected to be released this week. According to discom tariffs (without the subsidy element), with effect from 15 July, 2005 domestic power for 2-5 Kw load is charged at Rs 4.60 per unit for monthly consumption above 400 units, while industrial power, up to 100 Kw, is charged at Rs 5 per KwH up for a 10 Kw load.

Delhi chief minister Sheila Dikshit had earlier told Business Standard, "There is no need for a power tariff hike for Delhi residents as the power distribution companies have done well. However, I do not completely rule out a hike."

Last year, the power tariff hike was neutralised by the state government and power distribution companies that had contributed Rs 90 crore each in the form of subsidy and rebates.

However, while prospects that there will not be a hike may keep consumers happy, the Union power ministry has said providing subsidies is against the spirit of reforms. Delhi's power transmission company "" Delhi Transco "" has a revenue gap of around Rs 1,500 crore.