Delhi Discoms Cut Regulatory Assets by Rs 3029 cr in 5 Years

State energy transition study

Delhi Discoms have seen a steady decline in regulatory assets to Rs 8,377 crore over the last five years, down by Rs 3029 crore in that period.

The power sector in Delhi has seen a steady decline in regulatory assets to Rs 8,377 crore over the last five years, helping the AAP government keep tariffs under check, an official said.

The transformation of the Delhi’s power sector is best captured by the fact that tariff rates have continuously reduced in the last five years and are now the cheapest in the country, with round the clock power supply in all parts of Delhi, Delhi Dialogue and Development Commission Vice-Chairman Jasmine Shah said.

“At the same time the power discoms’ financial health has improved, as measured by regulatory assets,” Shah said.

Regulatory assets include receivables from customers. The gap between expenses shown by power discoms and the revenue recovered from consumers would accumulate as regulatory assets (RAs) over the years.

Since 2008-09, the combined RAs of the three discoms in Delhi- BYPL, BRPL and TPDDL shot up drastically from Rs 937 crore to Rs 11,406 crore in 2014-15, an officer of Delhi government’s power department said.

Ever since the new government has taken charge, the RAs have registered a steady decline from Rs 11,406 crore in 2014-15 to Rs 8,377 crore in 2018-19, showing a decline of Rs 3,029 crore in that period, said the officer.

The combined RAs of the three discoms were Rs 9,349 crore (2015-16), Rs 8,919 crore (2016-17), Rs 8,776 crore (2017-18) and Rs 8,377 crore in 2018-19.

“It’s important to understand that Delhi government’s power subsidy scheme for lower and middle-income electricity consumers is not a standalone initiative, it is the result of the power reforms in entirety that includes considerably bringing down regulatory assets and interventions like reducing losses, Shah said.

The Delhi government has fully subsidised monthly consumption of up to 200 units of electricity and extended 50 percent subsidy to consumers in the range of 201-400 units.

Additionally, the Delhi government played a major role in enabling discoms to enter into purchasing agreements for 2,000 MW of renewable power at the lowest rates in the country of about Rs 2.6 per unit, the officer said. These will kick in from 2020 onwards and will further bring down the power purchase cost.

It has also been reported recently that the state government’s plan to generate solar energy on agricultural land is set to take off next week. The power department will soon float tenders to invite companies to set up the solar plants under the Mukhyamantri Kisan Aay Badhotari Solar Yojana under the public-private participation model.